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The Kansas City Star reported Wednesday:

YRC Worldwide Inc. (NASDAQ:YRCW) today increased its earnings guidance for its second quarter, saying it expects adjusted earnings per share to be in the range of $1.53 to $1.58.

The Overland Park-based transportation company cited improved pricing.

The company’s previous guidance was $1.45 to $1.50 a share for the quarter. In a news release this morning, YRC said the guidance excludes estimated costs of 4 cents a share related to reorganization expenses and net gains on property disposals. Including those costs, reported EPS is expected to be in the range of $1.49 to $1.54.

As would be expected most trucking companies, like YRC, own lots of trucks. These result in high fixed costs because the depreciation, interest on loans and so on are charged no matter whether revenues are high or low. That, in turn, results in a good deal of earnings volatility. This is the third time in as many months that the company has revised its guidance.

First they lowered first quarter guidance on March 22.

Then they issued guidance that was higher than analyst estimates on April 24.

Given that even management has a hard time predicting earnings even one quarter in advance, it is no wonder trucking companies tend to trade at such low P/E multiples. It also explains why Landstar (NASDAQ:LSTR) earns its higher P/E.

Landstar’s asset-lite model uses trucks provided by independent contractors to carry the load, while its agents are paid on a commission basis to generate the loads carried. With its cost structure thus able to vary with revenue, its earnings stream is more predictable.

YRCW-LSTR 1-yr comparison:

YRCW-LSTR comparison chart

Source: Trucker's Choice: Asset-Lite Business Model Makes for Less Volatility (LSTR, YRCW)