Can YRC Worldwide Inc. (NASDAQ: YRCW) Save Itself?


When YRC Worldwide Inc (NASDAQ: YRCW) posted its 2Q2016 and 1H2016 financial results, it was clear that the results weakened compared to the year ago periods. But that didn’t stop the management from sounding optimistic, which leads to the questions of what the management knows about the future and whether you can remain confident that things will turnaround in the company.

Stable balance sheet

If you look at YRC Worldwide Inc (NASDAQ: YRCW)’s balance sheet, you begin to see why the management of the company is not raising the alarm despite the difficult global economic conditions. The company’s liquidity position improved significantly in 2Q2016 and the six months to June 30. As such, cash and cash balance as of June 30 stood at $278.8 million, indicating an increase of $52.7 million over the cash balance in the same period a year ago.

With adequate cash, YRC Worldwide Inc (NASDAQ: YRCW) can continue operating normally regardless of the difficulties in trucking industry. The Brexit vote and mixed economic data coming out of the U.S. and parts of Asia have created a difficult environment for many companies. But there are hopes that additional easing measures in Europe and Asia as expected in the near-future would help bring back demand for trucking services.

What happened in 2Q for YRC Worldwide Inc (NASDAQ: YRCW)?

YRC Worldwide posted EPS of $0.83 on revenue of $1.21 billion. But metrics declined from the same period last year. However, they were still better than the average Wall Street estimate that called for EPS of $0.51.

Despite beating the consensus estimate, YRC Worldwide’s CEO James Welch said in a statement that the results were not what were expected for the quarter. Going forward, he said the management will continue to focus on actions within its control to ensure that performance doesn’t deteriorate.

It also turns out that reinvesting is paying off for YRC Worldwide Inc (NASDAQ: YRCW) and that is an area that the management would want to focus on in the future to boost revenue and earnings.


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