YRC Worldwide: Transports, A Head Fake?
Uncle Sam giveth $600, and OPEC taketh away... YRC Worldwide, the biggest U.S. trucking company by sales,
reported a Q1 loss of $45 million vs $1.3 million profit last year,
on costs to shut 27 terminals and cut 1100 jobs as fuel costs rose and freight demand weakened.
Revenue dropped 4.1% yet YRC expects Q2 profit to be in line with street expectations.
This was the first profit expectation in four quarters. Stock price down 70% in the last year.
Analysts acknowledged that if the economy deteriorates further,
or if the company has substantial future missteps, the possibility does exist that YRC could violate debt covenants.
Moody's Investors Service lowered its ratings for YRC's debt earlier this week, citing
"a deep and possibly prolonged recession in the trucking market."
YRC CEO Bill Zollars: "The soft economy, severe winter weather and record fuel prices created a very difficult operating environment in the first quarter.
We're not planning on seeing any improvement in the economy for the rest of 2008. Most people have given up on the second-half- recovery theory.
Despite the macroeconomic challenges that we are facing, we believe that we have turned the corner."
The Nattering One muses... Perhaps like Shrub Sr's famous quote "the economy has turned the corner",
The YRC CEO omitted the rest of the statement, which should have been:
"we have turned the corner, flipped over three times, struck a tree and burst into flames."
On 11/06/07 we nattered about the "benefits" of $100 oil...
Meanwhile, the DJTA has gained 20% since its mid Jan low. Despite the following:
Burlington Northern & CSX, said its fuel costs in Q1 were up 55% from last year. Norfolk Southern pointed to a 63% rise in fuel prices.
UPS cut earnings guidance and reported its profit -9% with a domestic volume decline for only the 8th time in its 101 year history.
The top five US airlines all reported losses totalling over $1.4 billion on a 63% increase in jet fuel prices
Given the rising costs of crude; $120 a barrel; diesel fuel costs $4.14 a gallon nationwide, up 45% from last year; and a failing economy...
Conclusion: the gain in transports and this stock market rally would appear to be a massive head fake.
reported a Q1 loss of $45 million vs $1.3 million profit last year,
on costs to shut 27 terminals and cut 1100 jobs as fuel costs rose and freight demand weakened.
Revenue dropped 4.1% yet YRC expects Q2 profit to be in line with street expectations.
This was the first profit expectation in four quarters. Stock price down 70% in the last year.
Analysts acknowledged that if the economy deteriorates further,
or if the company has substantial future missteps, the possibility does exist that YRC could violate debt covenants.
Moody's Investors Service lowered its ratings for YRC's debt earlier this week, citing
"a deep and possibly prolonged recession in the trucking market."
YRC CEO Bill Zollars: "The soft economy, severe winter weather and record fuel prices created a very difficult operating environment in the first quarter.
We're not planning on seeing any improvement in the economy for the rest of 2008. Most people have given up on the second-half- recovery theory.
Despite the macroeconomic challenges that we are facing, we believe that we have turned the corner."
The Nattering One muses... Perhaps like Shrub Sr's famous quote "the economy has turned the corner",
The YRC CEO omitted the rest of the statement, which should have been:
"we have turned the corner, flipped over three times, struck a tree and burst into flames."
On 11/06/07 we nattered about the "benefits" of $100 oil...
Meanwhile, the DJTA has gained 20% since its mid Jan low. Despite the following:
Burlington Northern & CSX, said its fuel costs in Q1 were up 55% from last year. Norfolk Southern pointed to a 63% rise in fuel prices.
UPS cut earnings guidance and reported its profit -9% with a domestic volume decline for only the 8th time in its 101 year history.
The top five US airlines all reported losses totalling over $1.4 billion on a 63% increase in jet fuel prices
Given the rising costs of crude; $120 a barrel; diesel fuel costs $4.14 a gallon nationwide, up 45% from last year; and a failing economy...
Conclusion: the gain in transports and this stock market rally would appear to be a massive head fake.
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