Keep Arkansas Best (ABFS) on Hold

Jason H. Seidl and Matthew Elkott at Dahlman Rose recommend a Hold strategy for Arkansas Best ABFS, the trucking company. In its reported second quarter results, the company increased its revenues by 13% year-on-year. The improvement is due to a 12% increase in tonnage and higher LTL (Less Than truckLoad) prices. The company reported a net loss of $0.30 per share in second quarter of 2010 which was better than the analysts’ estimate of $0.37 per share. However, the company is looking to restructure its costs, seek teamster concessions and return back to profitability. The estimated EPS for 2011 is a positive net earnings of $1.05.