YRC Worldwide Inc., the struggling trucker seeking crucial union concessions to help refinance debt, fell the most in two years after reporting a quarterly loss amid driver shortages and higher costs.
The shares slid 21 percent to close at $7.72 in New York, the biggest one-day decline since October 2011.
Chief Executive Officer James Welch said the quarter was “hindered” by a shortage of drivers in the company’s freight network, resulting in higher than expected overtime pay and lower productivity. The results coincide with union talks on a new labor agreement that is key to refinancing debt and ensuring the company’s recovery.
The net loss of $44.4 million in the quarter ended Sept. 30 compared with profit of $3 million a year earlier, the Overland Park, Kansas-based company said in a statement yesterday. Operating expenses rose 3.1 percent to $1.25 billion.
YRC, which has posted annual losses since 2007, has asked its 26,000 union workers to extend a labor contract and keep enduring a 15 percent wage cut to help the company survive. The trucker is currently in talks with the International Brotherhood of Teamsters.
YRC has almost $1.4 billion in borrowings from what Welch has called “numerous missteps” before he became CEO in July 2011. The company had about $170 million of cash on hand as of Sept. 30. YRC has $944 million of bonds and loans that mature in the next 16 months, according to data compiled by Bloomberg.