Pacer's results also indicate its turnaround strategy was on track, even after giving up a significant part of its business.
"With a new Pacer model - one that is retail oriented vs wholesale - and a new management team, we believe we are in the early innings of a turnaround, and an improving environment is just what the doctor ordered," said BBT&T Capital Markets analyst Kevin Sterling.
Late last year, Pacer reached an agreement with Union Pacific to transfer its wholesale boxes to the railroad operator.
It lost about $174.1 million in 2009 prompting it to realign its cost structure. It has reduced SG&A expenses by $42 million on an annualized basis since 2009.
Robert W Baird analyst Jon Langenfeld said Pacer could make an attractive acquisition target given its significant presence in intermodal space, a clean balance sheet, and low capital intensity.
"Near-term uncertainty over earnings profile is the primary overhang and keeps us neutral-rated," said Langenfeld. (Reuters)
