Con-way slashes 08 outlook as economy "battered"

CHICAGO (Reuters) - Trucking and logistics company Con-way Inc (CNW.N) slashed its full-year 2008 earnings outlook on Wednesday as an embattled U.S. economy undercut demand for its services and forced it to lower prices.

"The economy has been battered by an unprecedented confluence of macroeconomic crises, curtailing demand for freight transportation services," Chief Executive Doug Stotlar said in a statement.

Con-way said the peak season the trucking industry -- normally in full swing by this time of the year ahead of the crucial U.S. holiday retail sales season -- has been weak so far.

Con-way said it now expects the full-year to be in a range between $2.60 and $2.80 per share. This was down from a previous range of $3.00 to $3.40 and significantly below analyst expectations for the full year of $3.23 per share.

"To date, the traditional peak seasonal uptick in demand has been muted so we expect the challenging business environment to continue through the 2008 fourth quarter," CEO Stotlar said.

The San Mateo, California-based company is regarded by analysts as one of the better performing, publicly-traded less- than-truckload operators. Less-than-truckload companies consolidate smaller loads into a single truck.

The U.S. trucking industry itself been battered since the third quarter of 2006 by a combination of the U.S. housing meltdown, weak retail sales and slumping auto sales.

The credit crunch has further compounded their woes.

The U.S. Commerce Department said last week that home sales fell to a 17-year low. U.S. auto sales have declined to 15-year lows.

Con-way's take on the economy echoed a point made by Ford Motor Co's (F.N) sakes chief Jim Farley earlier in the day after the industry released poor September sales figures.

"An already weak economy compounded by very tight credit conditions has created an atmosphere of caution," he said.

(Reporting by Nick Carey, Editing by Andre Grenon)