Monday, October 18, 2010

YRC Worldwide Pins Hopes On Higher Volume In Q3 2010

I can't resist another peek at my favorite "sick man" in trucking, YRC Worldwide.  It's claiming once again to be narrowing its losses.  It made this claim last quarter and turned out to be correct in the narrowest possible sense.  Good luck making that claim if the union leadership can't sell the latest round of concessions to its rank and file members.  Good luck keeping revenue up if the sluggish economy and the costs of complying with the Comprehensive Safety Analysis 2010 prove to be as tough as many truckers suspect

Oh, by the way, assertions that rising fuel costs help LTL carriers are dismissed in news that YRCW is counting on falling fuel costs to help its earnings.  Maybe that only works with LTL carriers that have pricing power, which YRCW should have given the size of its gross revenue.  Maybe this just shows that YRCW doesn't know what it's doing, or tries to spin changes in fuel costs any way it can if analysts aren't paying attention. 

I am not short this stock.  I have never had any position in YRCW (now briefly YRCWD since the reverse split), although I've been tempted to go short.  I'll resist that temptation as much as I can.  Maybe the company can pull off a miracle for the sake of their shareholders and employees.