Less-than-truckload logistics company YRC Worldwide Inc. (YRCW), formerly Yellow Corp. and known to many simply as “Yellow, still” on Friday reported a shrinking net loss in the first quarter and positive operating income for the first time in six years as the debt-riddled outfit continues to rebound from near bankruptcy four years ago.
YRC Worldwide reported consolidated operating revenue for the first quarter of $1.16 billion, down 2.7 percent from $1.19 billion in the first quarter of 2012. Net loss for the quarter was $24.5 million, or $2.93 per share, compared to a net loss of $85.5 million, or $12.40 per share in the year prior quarter.
Analysts were predicting a net loss of $5.75 per share and revenue of $1.2 billion.
Consolidated operating income, which doesn’t include non-operating expenses such as payments on debt, rose to $9.9 million, a sharp reversal from a $48.8 million loss in the year prior quarter. This year’s quarter benefits $4.5 million on asset disposals, whereas the year prior was negatively impacted $8.3 million. On an adjusted basis, EBITDA was $60.7 million in the latest quarter versus $15.3 million last year.
YRC Worldwide managed to shave operating expenses during the quarter to $1.15 billion from $1.23 billion last year.
The first quarter marked the third straight quarter of positive operating income and the first time since 2007 that Yellow started the year without negative operating income.
"Despite more difficult winter weather conditions in the first quarter of 2013 as compared to an unusually mild winter in 2012, our year-over-year operating results continue to improve," said James Welch, chief executive of Overland Park, Kansas-based YRC Worldwide, in a statement today. "As we have said previously, 2013 is a year of performance, and to that end, the year-over-year 500 basis point improvement in our operating ratio from 104.1 in 2012 to 99.1 in 2013 is evidence of such performance.”
Last week, the company unveiled a new network optimization plan for YRC Freight, its biggest top-line contributor, in an effort to further improve operations. The plan is expected to save up to $30 million annually. In the first quarter, YRC Freight revenue slid 4.5 percent to $753.8 million. Sales from its regional transportation arm improved 1.7 percent to $408.7 million.
In February, YRC reported a fourth-quarter net loss of $35.3 million, compared to a net loss of $84.2 in the fourth quarter of 2011. For all of 2012, operations earned $24.1 million, the first time in six years that the company posted positive operating income for a full year. Because the trucking company is so heavily buried in debt, however, interests costs and other non-operating charges are keeping a heavy thumb on corporate earnings. Through the past few years, the company has been staving off bankruptcy, including a debt exchange in 2009 with a face value of $470 million. Reverse-split adjusted shares fell as low as $4.56 early in 2012.
Shares are cruising higher in Friday action with the contraction in net loss that beat Wall Street expectations, even though revenue came up short. The stock price leapt ahead at the opening bell to $9.99 from Thursday’s close at $7.76 and is still holding around $10.76 as the lunch hour nears for gains of 38.7 percent after climbing as high as $11.60.
With the move, share are up 84 percent in 2013.
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