UPDATE 2-Saia Q1 loss soars on weak tonnage, lower margins

* Q1 loss per share $0.47 vs est. loss of $0.06

* Rev falls 17 pct

* Shares slump 17 pct (Recasts; adds details from conference call, analyst comments, updates share movement)

By Bhaswati Mukhopadhyay

BANGALORE, April 24 (Reuters) - Less-than-truckload carrier Saia Inc (SAIA.O) posted a much wider-than-expected quarterly loss, hurt by weak tonnage demand and lower margins, sending its shares down as much as 17 percent.

First-quarter margins were down mainly due to an "unprecedented reduction in tonnage" and rise in pricing pressure, the company said in a statement.

"If this environment continues for an extended period of time, then we could have issues with our debt covenants," Chief Financial Officer Jim Darby said in a conference call.

Even if Saia trips on its debt covenants, it will be able to get a waiver, analyst David Ross of Stifel Nicolaus & Co said.

There are too many trucks and too little freight, and that has been impacting companies such as Saia, said Ross, who has a "hold" rating on the stock.

The U.S. trucking sector has suffered from weak volumes since the third quarter of 2006, battered in succession by weak retail and auto sales, the housing sector meltdown and the overall slowing of the economy, which has been in recession since December 2007. [ID:nN24420532]

For the first quarter, the company reported a net loss of $6.3 million, or 47 cents a share, compared with a net loss of $833,000, or 6 cents a share, a year earlier. Analysts on average were expecting the company to post a loss of 6 cents a share, before special items, according to Reuters Estimates.

Revenue fell 17 percent to $206.1 million, coming in below analysts' average expectation of $217.8 million.

In the first quarter, less-than-truckload (LTL) tonnage per workday was down 7.2 percent.

Contract renewals have become more difficult as customers face increasing pressure to reduce their operating expenses, CFO Darby said.

Saia, which was earlier a subsidiary of No. 1 U.S. trucking company YRC Worldwide Inc (YRCW.O), cut salaries of its leadership team by 10 percent in April.

It suspended its 401(k) match, effective February, and also cut jobs.

The company, which competes with larger rivals like Con-way Inc (CNW.N) and Old Dominion Freight Line Inc (ODFL.O), sees annualized savings of $6 million from the 401(k) match and $18 million from the compensation and wage reduction.

Shares of Johns Creek, Georgia-based Saia were down 3 percent at $13 in afternoon trade on Nasdaq. They had earlier touched a low of $11.02. (Editing by Anil D'Silva and Deepak Kannan)