Earnings Decline at YRC Worldwide, Universal Logistics
YRC Worldwide Inc. and Universal Logistics Holdings Inc. reported weaker third-quarter profits in a continuation of the freight industry trend that has led to lower earnings at most companies.
YRC Worldwide's net income for the third quarter fell 30% to $13.9 million, or 42 cents per share, hurt by a decline in tonnage. Weakness at the trucking unit drove down Universal’s net income 46% to $5 million, or 18 cents.
Revenue at YRC, which ranks No. 5 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, fell 2% to $1.22 billion.
“Our third-quarter 2016 financial results were impacted by the soft industrial backdrop and lower fuel surcharge revenue compared to a year ago,” said James Welch, CEO at YRC Worldwide. “Year-over-year tonnage per day was down during the quarter, although it was the smallest decline at YRC Freight and the Regional segment in several quarters.”
Revenue fell 1.4% to $777.8 million at YRC Freight, but profit before interest and taxes rose 25% to $20.8 million. Tonnage per day declined 1.3%, and shipments per day dropped 2.3%.
At the regional unit, revenue slipped 2.6% to $443.7 million, leading to a 35% drop in profit before interest and taxes. Tonnage per day fell 1.5% at the regional unit.
The operating ratio worsened at the regional unit to 95.1 from 92.6 and improved to 97.3 from 97.9 at YRC Freight.
At Universal, the drop in profit was linked to weakness in the trucking unit, where revenue fell 8% to $163.6 million, reflecting a 10% drop in revenue per load and a 2% rise in shipments hauled.
Revenue at No. 30 Universal was off 5% at $271.5 million.
Earlier in October, Universal said its results would miss the forecast of 29 cents per share in an analyst poll.
