Friday, September 09, 2005

Yellow Roadway cuts guidance on Katrina damage

Transportation company Yellow Roadway Corp. lowered its guidance for the quarter on Thursday, blaming disruptions caused by Hurricane Katrina and problems integrating new procedures at its Roadway Express division.
The Overland Park-based company said third quarter earnings would range from $1.40 to $1.45 per share, well below the company's earlier expectations of $1.60 to $1.65 per share. Yellow said it would update its annual earnings figures when it releases the earnings next month.
Analysts surveyed by Thomson Financial expected quarterly earnings of $1.63 per share, and a full-year profit of $5.44.
Yellow estimated disruptions from Katrina would have a 5 cent per share effect on earnings, although the company added "the situation continues to unfold."
The bulk of the setback, however, was blamed on the company putting new operational procedures in place at Roadway Express and "the associated learning curve that negatively affected efficiency."
The company also announced that Roadway President Robert L. Stull was retiring after 28 years at Yellow and would be replaced immediately with Michael J. Smid, who has held several positions at the company.
Yellow released the new guidance after the markets closed Thursday. Its shares fell 5.2 percent, or $2.41 in after-hours trading after ending regular trading 55 cents lower at $46.01 on the Nasdaq Stock Market.
Yellow shares have traded between $43.31 and $64.47 over the past year.


ircookiemonster said...

Docksteward please explain to me what does this means "the associated learning curve that negatively affected efficiency." Is that new cross dock thingy ?

1Teamster said...

Hey IRC.....I think it is refering to OE Ops. It's the do more with less and the lean processes. They cut back lots of supervision and replaced experienced with new guys that don't know how a trucking company works. DS.

ircookiemonster said...

Do you think Mr Stull was forced out because of the failure of this ?

1Teamster said...

I really don't think he meshed well with the "Yellow" way. The "new guy" is a service guy and we all know that is what makes us $$$. I also think Zollars made this call and shows us that Yellow is taking the reins.

Anonymous said...

For the next hurricane katrina ; the easy way to keep going.