Deutsche Bank Reports On Solid Q1 For CNW

Deutsche Bank, in reporting on strong Q1 results for the company, maintains its Buy rating and its $44 price target on Con-Way Inc. CNW. According to Deutsche Bank, “Yesterday after the close, CNW reported adjusted Q1 EPS of $0.24 materially above our estimate and Consensus of $0.04. Upside was driven by improving pricing (yields, net of fuel were up 5.6% y/y), better mix (weight/shipment was up 3.8% y/y and LOH was down 0.4% y/y), and improved cost controls. While we believe CNW improved LTL linehaul (using more internal capacity [which was likely aided by its trailer technology] thereby lowering its reliance on outside TL providers, our sense is that purchased transportation was roughly flat y/y due only to rising fuel prices (the price of diesel was up 26% y/y on average in Q1 2011). We believe CEO Doug Sotlar deserves credit for a re-energized Con-way Freight, which is now sporting a better book of business (more balanced network) and improved cost structure.” CNW closed yesterday at $37.60.