Jan. 21--Wabash National Corp. stock rose 25 cents to close at $17.625 Monday, even though the company's fourth-quarter earnings were less than expected and down 70 percent from 1995.
The reason, analysts said, was that the earnings were better than the 1 cent per share that Wabash posted in each of the two preceding quarters, a signal that the fortunes of the Lafayette-based truck-trailer manufacturer are on the upswing.
"I suppose one could view this as a turnaround," said Chris Mecray of Alex Brown in Baltimore.
Wabash National reported earnings of $1.24 million in the quarter, down 73 percent from $4.56 million in the fourth quarter of 1996. Its per-share earnings dropped 71 percent to 7 cents from 24 cents, and its revenue fell 10 percent to $168.4 million from $187.1 million.
For the year, Wabash National's earnings fell 86 percent to $3.6 million, or 19 cents per share, from $25.4 million, or $1.34 per share. Its sales dropped 14 percent to $631.5 million from $734.3 million.
In addition to being off significantly from a year earlier, Wabash National's earnings were below analysts' estimates. The company was expected to earn 9 cents per share for the quarter, according to an average of estimates by seven analysts surveyed by Zacks Investment Research.
Much of Wabash National's problems stemmed from a severe slump in the freight industry that drove two Indiana-based truck trailer manufacturers -- Monon Corp. of Monon and Fruehauf Trailer Corp. of Indianapolis -- into bankruptcy court last year.
But analysts said the freight industry's slump is easing. That, plus other factors, including a reduction of competitive pressure due partially to the Monon and Fruehauf bankruptcies, enabled Wabash National to boost its profit margins in the fourth quarter.
"We achieved improved margins, improved working capital positions and improved manufacturing efficiencies, resulting in higher earnings," said Jerry Ehrlich, Wabash National's chairman, president and chief executive officer.
Ehrlich also said Wabash National is taking steps to make itself less dependent on the traditional U.S. trailer market.
"They're beginning to enter Germany with some of their trailer products," said Leon Dodge, an analyst with GS2 Securities of Milwaukee.
Wabash National also is constructing a plant in Lafayette to make the composite used in its composite plate trailers. Those are a new product with walls made of composite, a vinyl-like substance, sandwiched between two sheets of steel.
"It's going to be a very competitive product," Dodge said.
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