YRC Worldwide reported a net loss of $274 million on $1.1 billion in revenue in the first quarter of 2010, despite deep cuts in operating expenses from a year ago.
Losing 25% of your topline while YOY volume declined is a death spiral. Companies that lose as much money as YRCW don't have the luxury of waiting a long time to see the results of their turnaround effort. YRCW is making all the right moves in reshuffling its board but it's still hamstrung by its unionized workforce. Pension plan contributions coming due are another facet of the problem YRCW faces in dealing with unionized drivers who think they can play a game of chicken in negotiations. These problems may be insurmountable.
Full disclosure: No position in YRCW at this time.
