YRC Worldwide 1Q loss balloons as revenue tumbles
KANSAS CITY, Mo. — YRC Worldwide Inc., one of the nation’s largest trucking companies, on Thursday reported a larger-than-expected first-quarter loss as hefty restructuring charges exacerbated a big drop in shipments amid the dismal economy.
Overland Park, Kan.-based YRC Worldwide booked $164 million in charges related to the integration of its Yellow and Roadway divisions and subsequent layoff of more than 3,000 workers. The company posted a loss of $257.4 million, or $4.34 per share, for the three months ending March 31, compared with a year-ago loss of $46.4 million, or 82 cents per share.
Excluding one-time integration costs and changes to its regional truck lines, the company said it would have lost $251 million, or $2.63 per share, in the latest period. That was still far worse than the $1.90-per-share loss expected by analysts surveyed by Thomson Reuters. Analysts typically exclude one-time charges from estimates.
Revenue during the quarter fell 33 percent to $1.50 billion, widely missing the $1.61 billion expected by analysts.
YRC said the economy continued to hammer its operations, cutting daily tonnage for its national business by almost 30 percent and reducing daily tonnage for its regional business by 22 percent, once adjusted for the network changes.
Chief Executive Officer Bill Zollars said the restructuring reduced the company’s excess capacity and made it more competitive, estimating that YRC will cut expenses by $600 million this year. The company also said it generated $176 million from asset sales and leaseback transactions.
But Zollars acknowledged that the uncertainty surrounding the integration of Yellow and Roadway caused some customers to go elsewhere, adding to the decline in business affecting the entire transportation sector.
“Some customers have already returned business, which was temporarily diverted, but it is difficult to predict at what levels or how quickly the rest will come back,” he said in a statement.
The company continued to withhold earnings guidance for the remainder of the year, due to the uncertain economy. Analysts expect a full-year loss of $3.57 per share on about $7 billion in revenue, on average.
YRC released its earnings after the markets closed Thursday. During regular trading, shares lost 36 cents, or 9.2 percent, to close at $3.55.
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