Transportation company YRC Worldwide Inc., whose brands include Yellow Transportation and Roadway, said Thursday its third-quarter profit rose 12 percent on lower expenses, as revenue edged up 3 percent. But the company issued a disappointing outlook, sending its shares down 41 cents to $38.79 in [Thursday] aftermarket trading. They closed up 39 cents at $39.20 in regular Nasdaq trading.
For the full year, YRC projects a profit of $5.45 to $5.55 per share on revenue of about $10 billion. In July the company had projected year earnings of $5.65 to $5.85 per share on revenue of $10 billion.
That is a $0.20 per share guidance reduction with just one quarter left in the year. Next year’s EPS could be $1.00 or more less than current estimates. As we said before, trucks cost money even when they aren’t being used. As the economy slows, those companies like CH Robinson (NASDAQ:CHRW) and Landstar (NASDAQ:LSTR) that get their capacity from independent contractors on an as-needed basis have lower overhead expenses and remain profitable. If the economy slows much further, YRC’s guidance reductions will be even larger.
YRCW 1-yr chart:
Disclosure: Author does not own shares of YRCW.