YRC posts lower revenue in second quarter, weighed down by costs of unit's realignment

YRC Worldwide Inc. said today that its second-quarter operating revenues declined less than 1 percent from the same period in 2012. Its long-haul unit, YRC Freight, posted lower revenue and a wider operating loss over the year-earlier quarter.

YRC Freight, which accounts for nearly 60 percent of the parent company's revenues, posted an $8.5 million operating loss in the quarter, compared with a $5.1 million operating deficit in the 2012 period. Revenues for the unit dropped nearly 3 percent year-over-year, the Overland Park, Kan.-based less-than-truckload carrier said. Operating ratio, a measure of expenses over revenue, increased 0.5 percent to 101. That means that YRC Freight spent $1.01 during the quarter for every dollar in revenue it took in.

Company executives attributed the declines at YRC Freight to the impact of a major network realignment implemented in May, a period that coincided with an increase in traffic. As a result, operations and service quality were affected, according to Jeff Rogers, YRC Freight's president.

Rogers said in today's statement that the network realignment, the second largest such change in the company's long history, has been completed. Service has since returned to levels in place before the changeover, Rogers said.

The plan allowed YRC Freight to close breakbulk terminals in Cincinnati, St. Louis, and Memphis. It also consolidated "end-of-line" terminals that were used as freight pickup and final delivery points in San Jose, Calif.; Youngstown and Mansfield, Ohio; and Daytona Beach, Fla., among other cities.

YRC said at the time that the restructuring was unveiled in March that it would lead to the loss of 760 dock, shop, office, and cartage jobs, as well as 452 over-the-road driver positions at the various affected terminal locations. At the same time, 343 over-the-road driver jobs would be created, along with 639 cartage positions. All told, the restructuring is expected to result in a net loss of 230 jobs.

YRC's regional transportation unit, comprised of carriers Holland, New Penn, and Reddaway, posted operating revenues of $444.9 million, up 3.5 percent from 2012 levels. Operating income rose 10 percent from the same period a year ago, while the unit's operating ratio fell to 94.3 from 94.7.

Both the national and regional units showed year-over-year gains in revenue per hundredweight, a sign of better yields for the freight they handled during the quarter.

YRC stock was down more than 16 percent in midafternoon trading.