Disgruntled investors dumped shares of less-than-truckload (LTL) trucking operator YRC Worldwide Inc (NASDAQ:YRCW) after the company declared worse than expected results for its third quarter.
The stock tanked 27.94% and closed Friday at $9.75 on volume of 3.47 million shares.
LTL trucking operators have been affected by weak industrial demand for their services. “Any way you slice it, the industrial economy in the U.S. – the main driver of LTL freight – remains weak, if not still in recession, in our opinion,” said David Ross of Stifel Capital Markets in a research note, as quoted by Fleetowner.
YRC Worldwide Inc (NASDAQ:YRCW) misses on Q3
For its third quarter, YRC reported EPS of $0.42, which missed by $0.11 and revenue of $1.22 billion, which too missed by $10 million and was down 1.6% year on year.
“Our third quarter 2016 financial results were impacted by the soft industrial backdrop and lower fuel surcharge revenue compared to a year ago,” said James Welch, chief executive office at YRC Worldwide. “Year-over-year tonnage per day was down during the quarter although it was the smallest decline at YRC Freight and the Regional segment in several quarters. We continue to believe pricing discipline in the LTL sector remains steady despite the near-term headwinds.”
However, in contrast, smaller competitor Saia, Inc. (NASDAQ: SAIA) managed to beat street expectations for both earnings and revenue for its third quarter. It reported EPS of $0.54 that beat by $0.04 and revenue of $316.44 million beat by $6.17 million.
The company cited pricing discipline, improvement in operating efficiencies and productivity for its performance. “Though the economic environment continues to offer only tepid growth, I was encouraged to see our LTL shipment trend turn positive in September for the first time since February,” said Saia President and Chief Executive Officer, Rick O’Dell.
Both companies have blamed the slow economic environment. That should change now given that US economic growth is catching an uptrend.