YRC Worldwide Loses $25.3 Million in First Quarter, Misses Analyst Estimates
YRC Worldwide Inc. lost more than double the amount of money it did a year ago, marking 10 consecutive years the less-than-truckload carrier ended the first quarter in the red.
The Overland Park, Kan., company lost $25.3 million in the first three months of 2017, shedding 78 cents per share, much worse than Bloomberg News forecast of 37 cents based on a survey of industry analysts.
One year ago, YRC lost $12 million, or 37 cents.
“Although we are somewhat disappointed in our [first-quarter] consolidated results, we firmly believe the fundamentals of our business remain intact and, in fact, are improving, which we expect will result in positive financial performance moving forward based on the investments we’ve made in technology,” CEO James Welch said in a conference call with industry analysts.
Top-line revenue improved 4.5% to $1.17 billion, topping the $1.15 billion forecast, but expenses rose at a higher 6% rate. The result was a $3 million operating loss, down from a $13.4 million in operating income one year ago.
YRC lost $2.7 million on the disposal of property versus a $300,000 gain a year ago. Salaries, wages and employee benefit costs climbed to $721.7 million from $698.1 million. Operating expenses and supply costs rose from $216.3 million from $190.2 million.
Welch said that March’s EBITDA was better than a year ago.
“During the first quarter, we took steps to extract cost out of the business,” Welch said. “In addition to savings from eliminating approximately 180 positions, we reduced the utilization of external professional services and increased collaboration across all four operating companies.
YRC Freight tonnage rose 3.4% and shipments per day increased 2.1%, but it was outweighed by a 1.7% drop in revenue per 100 pounds of freight. As a result, YRC Freight generated a $10.5 million operating loss versus a $4.1 million operating income a year ago.
In the regional transportation unit, consisting of YRC Reimer, Holland, Reddaway and New Penn, tonnage per day grew 2.1% and shipments per day increased 0.3%. Revenue per 100 pounds of freight went up 0.2%. Regional transportation operating income dropped 1.6% year-over-year to $12.2 million.
“We believe the pricing environment in the LTL industry remains rational. We intend to stick with our strategy to improve price, freight mix and profitability and our goal in 2017 is to exceed our 2016 adjusted Ebitda while meeting our customer’s needs,” Welch said.
The adjusted EBITDA for the first quarter fell to $43.2 million, lower than the Bloomberg News forecast of $52 million and down from $62.9 million one year ago.
YRC ranks No. 5 on the Transport Topics Top 100 list of the largest U.S and Canadian for-hire carriers.
CORRECTION: This article has been updated to fix incorrect information that YRC violated its debt covenant ratio. YRC entered into an amendment to its credit agreement in January and results were within the updated leverage ratios.
