Overland Park, Kan.-based YRC Worldwide plunged in after-hours trading Tuesday, after YRC announced Q3 earnings that fell far short of expectations.
Quarterly losses at the less-than-truckload-weight trucker, which came to $4.45 per diluted share, exceeded even last year's Q3 loss of $4.30 per share. They badly missed analysts' mark of an expected $0.46-per-share loss. Revenues for the quarter grew somewhat in comparison to last year but still failed to meet the consensus expectation of $1.26 billion.
Explaining the miss, YRC CEO James Welch noted that the company's YRC Freight division -- of which he was recently appointed president -- bears most of the blame: "[T]hird-quarter performance was hindered by declines in service, manpower shortages, and declines in yield." In particular, Welch noted that because of "summer vacations and the movement of drivers resulting from the network optimization, we were short drivers in certain terminals, which ... affected service in those areas."
Welch promised to take the freight division in hand and control costs while improving service. Investors, however, appear unwilling to wait around and see if he can accomplish this. At last report, shares were down 29% after-hours, on top of the 8.5% decline experienced in regular-hours trading.
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