YRCW shows more signs of improvement in Q1 results
May 03, 2012
Slow and gradual improvement trends remained intact for less-than-truckload (LTL) transportation services provider YRC Worldwide in its first quarter earnings statement, which was released today.
The Overland Park, Kan.-based carrier reported that its quarterly consolidated operating revenue—at $1.194 billion—was up 6.4 percent annually, while its consolidated operating loss—of $48.8 million—included an $8.4 million loss on asset disposals.
Today’s earnings release follows an announcement made by the company on Monday, when it stated that it reached agreements with its lenders to reset certain financial covenants over the life of millions of dollars worth of loans. YRC said its lenders agreed to allow the carrier to retain all proceeds from the auction of certain surplus properties and terminals. YRC added that new lending agreements were supported by all of its term credit agreement lenders and all of its ABL credit agreement lenders.
YRC has lost more than $2.6 billion in the last five years.
“We are experiencing increased efficiencies at each of our operating companies,” said James Welch, chief executive officer of YRC Worldwide, in a statement. “Our employees are responding extremely well to our operating changes to regain a leading position in the LTL industry. This is an exciting time at YRCW as our team now has the financial flexibility and the tools to take this business to the next level. Our plan is to continue building on this positive momentum throughout 2012 with the determination of delivering consistent, high-quality service that is both reliable and cost effective. The feedback we’re getting is that our operating companies are providing the service levels our customers expect, and they are rewarding us with increased levels of business as our first quarter results indicate.”
Operating revenue for YRC Freight, which was re-named from YRC National Transportation in early February, improved by 8.1 percent to $789.1 million. Tonnage per day at YRC Freight was up 3.5 percent year-over-year, shipments were up 2.8 percent, revenue per hundredweight was up 3.3 percent, and revenue per shipment was up 4.0 percent.
YRC Regional’s operating revenue was up 9.8 percent to $402.0 million. Daily tonnage was up 6.0 percent and revenue per hundredweight was up 4.5 percent. Daily shipments were up 4.3 percent, and revenue per shipment was up 6.2 percent.
Since the depths of the recession in 2009, when LTL carriers ostensibly lost much of its pricing power, the pendulum has been slowly working its way back into the favor of LTL carriers. While YRCW has a ways to go still before it is financially solvent, this quarterly performance continues a positive trend in that its losses in recent quarters continue to narrow.
At this week’s NASSTRAC Logistics Conference and Expo in Orlando, John Barnes, transportation analyst at RBC Capital Markets, said that overall LTL market conditions are recovering.
“What a difference a year makes,” said Barnes. “Things have gotten modestly better. LTL tonnage is up higher compared to truckload year-to-date. I anticipate volumes [in 2012] will be in the 4-to-5 percent range, as LTL recovers market share from other modes of transportation.”
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