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Earnings Watch: YRC Worldwide 1st Quarter Loss Doubles

May 4, 2017

By Evan Lockridge

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Financial losses for YRC Worldwide Inc., parent to both national and regional less-than-truckload carriers, more than doubled in the first quarter of the year despite a small upturn in revenue.

YRC reported a net loss of $25.3 million in the most recent quarter, or 78 cents per share, worse than analysts expectations. This compares to a net loss a year ago of $12 million, or 37 cents per share. Revenue in the most recent quarter was $1.17 billion versus $1.12 billion a year earlier.

According to CEO James Welch, while the company’s regional carriers’ performance was in line with results from a year ago, including an increase in tonnage per day, its national LTL fleet ran into problems.

“YRC Freight’s results in the first quarter were unfavorably impacted by a year-over-year decrease in revenue per hundredweight, excluding fuel surcharge, that more than offset increases in tonnage per day and weight per shipment,” he said. “We expect the improvement in year-over-year tonnage per day to help us execute our strategy of pricing for profitability and moving shipments through YRC Freight, Holland, Reddaway and New Penn’s networks that have favorable freight characteristics.”

Despite the challenges, Welch said YRC believes the pricing environment remains stable in the less-than-truckload sector and the company’s goal for 2017 is to beat its 2016 EBITDA (earnings before interest, taxes, depreciation and amortization) numbers.

To help meet this goal, YRC implemented a plan during the first quarter of 2017 to eliminate approximately $25 million of costs over the next year. The savings include downsizing the management and other non-union workforce by approximately 180 positions.

“Headcount reduction is the most significant source of savings while other changes included increasing collaboration across our companies and reducing the utilization of external professional services,” said Welch.

During the first quarter, YRC Freight recording an operating loss of $10.5 million compared to an operating profit of $4.1 million a year ago, despite a 4.8% increase in revenue totaling $728.9 million.

Its regional operations reported operating income of $12.2 million, down 2.4% from the first quarter of 2016 as revenue increased 4% to $441.8 million.

First quarter 2017 tonnage per day increased 3.4% at YRC Freight and 2.1% at the regional segment compared to first quarter 2016.

Comments

  1. 1. MC [ May 05, 2017 @ 04:49AM ]

    YRC needs to clean up their act. I wouldn't use them if I didn't have to, but corporate contracts force my hand. Oftentimes, freight arrives beat up- sometimes missing pieces, drivers show up late, and some shipments take weeks to get to their destinations. There's no communication from YRC when drivers are late for pickups or when freight is delayed en route. I've had several shipments take 2 weeks or more to go 600 miles and even had one shipment take 3 weeks to go 200 miles (in every one of those instances, pieces were missing, sometimes entire skids). IMO, it just shows a complete lack of respect for their customers. Typical crony capitalist leadership that doesn't understand that if you put people first, the profits will come. However, status quo for crony capitalists is "profit at all costs"- a mantra that is self-defeating.

  2. 2. Lowell [ June 06, 2017 @ 03:58PM ]

    I really question this person on the whole. YRC is a long haul ltl carrier and should not be used for 200 mile shipments. Using two instances to characterize any person or company is poor. Facts..how may shipment on time versus how many shipments late over a 30 day period.

 

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