NOL

NOL: Post 1QFY13 disappointing results, CS lower its FY13 and FY14 earnings estimates by 38% and 15% respectively. Volumes and freight rates continue to weaken in most trades routes as over-capacity persists; CS estimates flat volumes for NOL in 2013, with rates up ~6%, largely on account of the revenue weighting that limited Transpacific contract improvements have. Contract setting season for the Transpacific trade lane is almost complete, and it appears that carriers have received ~US$50-100/FEU increase (30% of its proposed hikes). This has a major impact on NOL, which generates 40% of its revenue from this trade lane. CS currently have estimates which are above the street, but maintains UNDERPERFORM with TP of $0.95 for NOL.