YRC Wordwide’s 2Q17 Earnings Missed the Estimate

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Part 4
YRC Wordwide’s 2Q17 Earnings Missed the Estimate PART 4 OF 7

YRC Worldwide’s Regional Segment: Can Revenue Growth Continue?

Regional Transportation’s 2Q17 results

In this part of the series, we’ll take a look at YRC Worldwide’s (YRCW) Regional Transportation segment’s performance in 2Q17. The segment’s vertical accounted for 37.4% of its total operating revenues in the reported quarter of 2017.

In 2Q17, the Regional Transportation segment saw revenues of $471.2 million. That was a 4.1% rise from $452.8 million in the second quarter last year. It’s worth noting that 2Q17 had 63.5 work days compared to 64 work days in the second quarter of 2016.

YRC Worldwide&#8217;s Regional Segment: Can Revenue Growth Continue?

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Regional Transportation’s 2Q17 operating metrics

The year-over-year per-day tonnage for YRCW’s Regional Transportation segment rose 3.6% in 2Q17. Compared to the tonnage per day in 2Q16, it rose 1.4% in April, 3.9% in May, and 5.1% in June 2017. In the second quarter of 2017, excluding the fuel surcharge revenue, the per hundredweight revenue rose 0.20%. With the impact of fuel surcharge revenues, it rose 1.2%.

The segment’s revenues per shipment, excluding the fuel surcharge, rose 1.9% in 2Q17. It rose 3.0% when the fuel surcharge was included. The segment’s vertical total weight per shipment in pounds rose 1.7% in the reported quarter.

Management’s outlook

YRC Worldwide expects a better tonnage per day in the Regional Transportation segment in the second half of 2017. In July 2017, the company witnessed a 4.0% rise in per day tonnage against a flat tonnage in the YRC Freight vertical. However, certain driver shortage issues might create service disruptions in this segment in the rest of 2017.

Investing in ETFs

Transportation is part of the industrial sector. If you’re looking for indirect exposure to transportation and other industrial stocks, you can consider the Industrial Select Sector SPDR ETF (XLI). The major industrial companies included in XLI, in the order of XLI’s holdings, are General Electric (GE), 3M (MMM), and Boeing (BA).

Next, let’s look at YRCW’s 2Q17 operating margins.


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