YRC Tumbles as Driver Shortage Hurts Trucker Seeking CutsCaroline Chen
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.