Shares of YRC Worldwide Inc. were up almost 2 percent today on speculation that the Overland Park trucking giant may be in play.
In midday trading on the Nasdaq Stock Market, YRC Worldwide shares were up 76 cents, or 1.96 percent, at $39.50 after earlier rising to $39.98.
In its June 4 edition, BusinessWeek speculates that YRC, “burdened with dismal earnings because of higher fuel costs and bad weather” may be an attractive buyout target.
Chairman and Chief Executive Officer Bill Zollars didn’t dismiss the possibility, noting the recent private equity bid for Chrysler Group. Zollars said: “It’s always possible, with all the liquidity around.”
Analyst Justin Yagerman of Wachovia Securities told the magazine that YRC Worldwide offers “compelling earnings power and potential value.” Yagerman said he thinks YRC’s shares could be worth $53. He rates the shares at “outperform.”
Saturday, May 26, 2007
Congress Votes to Block Unsafe Mexican Trucks From U.S. Highways
Teamsters Score Major Victory In Fight For Highway Safety
The Teamsters Union scored a major victory in the fight against keeping unsafe Mexican trucks off of U.S. highways, with Congress voting yesterday to further tighten restrictions on the Bush administration's pilot program, effectively delaying the reckless project.
"Democrats and Republicans alike heard loud and clear the driving public's overwhelming opposition to the Bush administration's reckless plan to throw open our borders to unsafe Mexican trucks," said Jim Hoffa, Teamsters General President. "I applaud Congress for acting quickly to keep our roads safe."
Additional restrictions on Mexican trucks traveling into the United States beyond the commercial zones, originally part of a House bill sponsored by Rep. Nancy Boyda, D-Kan., were added to the War Supplemental Appropriations bill. The funding bill passed the House by a vote of 280-142 and the Senate by a vote of 80-14.
The bill requires the Transportation Department's inspector general to make sure the department is able to impose U.S. safety rules and conditions on Mexican trucks that travel beyond the commercial zone.
The inspector general must also report to Congress whether the pilot program is hurting highway safety and whether safety laws are being enforced.
The bill requires the Transportation Department to tell the public exactly how it will make sure the pilot program is safe and that all drivers are able to speak English, as required by law. Transportation officials must also reveal how they plan to ensure Mexican truck drivers only pick up and deliver goods between the two nations, and not between two points inside the United States.
The Teamsters Union scored a major victory in the fight against keeping unsafe Mexican trucks off of U.S. highways, with Congress voting yesterday to further tighten restrictions on the Bush administration's pilot program, effectively delaying the reckless project.
"Democrats and Republicans alike heard loud and clear the driving public's overwhelming opposition to the Bush administration's reckless plan to throw open our borders to unsafe Mexican trucks," said Jim Hoffa, Teamsters General President. "I applaud Congress for acting quickly to keep our roads safe."
Additional restrictions on Mexican trucks traveling into the United States beyond the commercial zones, originally part of a House bill sponsored by Rep. Nancy Boyda, D-Kan., were added to the War Supplemental Appropriations bill. The funding bill passed the House by a vote of 280-142 and the Senate by a vote of 80-14.
The bill requires the Transportation Department's inspector general to make sure the department is able to impose U.S. safety rules and conditions on Mexican trucks that travel beyond the commercial zone.
The inspector general must also report to Congress whether the pilot program is hurting highway safety and whether safety laws are being enforced.
The bill requires the Transportation Department to tell the public exactly how it will make sure the pilot program is safe and that all drivers are able to speak English, as required by law. Transportation officials must also reveal how they plan to ensure Mexican truck drivers only pick up and deliver goods between the two nations, and not between two points inside the United States.
Tuesday, May 22, 2007
Arkansas Best Beats Most Earnings Estimates
Rough 2007 Still Expected
Arkansas Best Corp. went from zero to 19 cents in just one quarter to beat the earnings estimate of Stephens Inc., but market challenges loom in future quarters.
Neal Deaton, Stephens associate analyst, said the Little Rock-based investment banking and securities firm expected flat earnings from the company in its release Wednesday.
Instead, Arkansas Best reported that it earned 19 cents per share, down 17.39 percent from 23 cents in first quarter 2006.
Stephens has provided financial and other services to Arkansas Best within the past year and expects to receive or seek compensation for investment banking services in the next three months.
Analysts surveyed by Thomson Financial expected quarterly earnings of 15 cents, according to the Associated Press.
Despite the dip from last year, beating most analyst estimates may have been what pushed the company's stock price higher.
Shares of Arkansas Best (NASDAQ: ABFS) closed Wednesday at $41.52, up $2.32 cents. In the past 52 weeks, the price ranged from a $49.81 high to a $34.90 low.
Arkansas Best's largest subsidiary is less-than-truckload carrier ABF Freight System.
"Industrial trends that affect the LTL environment more than the truckload have been pretty weak," Deaton said. "Pricing will pick up more in TL than LTL. Many people were expecting a second-half, robust recovery, and we're almost into May. We certainly haven't seen any major changes."
Tonnage in second quarter 2006 was up 6.4 percent from second quarter 2005 for Arkansas Best, and that will make comparing second quarter 2007 to 2006 even tougher when it reports results again in July, he said.
What happens to the trucking industry and freight demand in May could give a better indication of what the rest of 2007 will do, Deaton said.
Falling freight demand was one thing that helped knock Arkansas Best's comparables lower in first quarter 2007 though.
Net income fell 21.73 percent to $4.8 million from $6.12 million in first quarter 2006.
Total revenue dropped 0.56 percent to $422.6 million from $425 million a year earlier.
Tonnage declines that began in the last quarter of 2006 slid into this year, too.
In a conference call with analysts Wednesday, Bob Davidson, Arkansas Best president and chief executive officer, said all three months saw dips of between 4.5 and 6.5 percent.
So far, he said April didn't look much better than March.
Arkansas Best continues to implement its new Regional Performance Model offering next-day and second-day delivery in most of its markets at an annual cost of $20 million.
Expanding the new service in the middle of what looks to be an industrywide slowdown in freight demand is challenging, Davidson said, but he still expects the RPM to payoff in revenue in the longterm.
"Arkansas Best's biggest problem is increased competition from UPS and FedEx in the long-haul arena," Deaton said. "It's a good move to go to next-day regional service, but it comes at a cost and will impact their quarters."
Notable
"The core fundamentals haven't changed much. Pricing has stayed stable which they're known for. You can't control volume. It's sluggish right now and there aren't many signs of improvement." Neal Deaton, Stephens Inc. associate analyst.
"With less than a year left before the expiration of ABF's labor agreement, we feel our conservative financial position is appropriate at this time. Our liquidity and financial situation puts us in an excellent position to take advantage of opportunities that might arise in contract negotiations, including solutions to deal with the underfunded, multiemployer pension plan." Judy McReynolds, Arkansas Best chief financial officer.
By The Numbers
1.62 million -- The number of shares Arkansas Best has repurchased since January 2003 for a total cost of about $56.8 million, according to the company.
15 cents -- Dividend to be paid on May 22 to Arkansas Best shareholders of record on May 8, according to the company.
Arkansas Best Corp. went from zero to 19 cents in just one quarter to beat the earnings estimate of Stephens Inc., but market challenges loom in future quarters.
Neal Deaton, Stephens associate analyst, said the Little Rock-based investment banking and securities firm expected flat earnings from the company in its release Wednesday.
Instead, Arkansas Best reported that it earned 19 cents per share, down 17.39 percent from 23 cents in first quarter 2006.
Stephens has provided financial and other services to Arkansas Best within the past year and expects to receive or seek compensation for investment banking services in the next three months.
Analysts surveyed by Thomson Financial expected quarterly earnings of 15 cents, according to the Associated Press.
Despite the dip from last year, beating most analyst estimates may have been what pushed the company's stock price higher.
Shares of Arkansas Best (NASDAQ: ABFS) closed Wednesday at $41.52, up $2.32 cents. In the past 52 weeks, the price ranged from a $49.81 high to a $34.90 low.
Arkansas Best's largest subsidiary is less-than-truckload carrier ABF Freight System.
"Industrial trends that affect the LTL environment more than the truckload have been pretty weak," Deaton said. "Pricing will pick up more in TL than LTL. Many people were expecting a second-half, robust recovery, and we're almost into May. We certainly haven't seen any major changes."
Tonnage in second quarter 2006 was up 6.4 percent from second quarter 2005 for Arkansas Best, and that will make comparing second quarter 2007 to 2006 even tougher when it reports results again in July, he said.
What happens to the trucking industry and freight demand in May could give a better indication of what the rest of 2007 will do, Deaton said.
Falling freight demand was one thing that helped knock Arkansas Best's comparables lower in first quarter 2007 though.
Net income fell 21.73 percent to $4.8 million from $6.12 million in first quarter 2006.
Total revenue dropped 0.56 percent to $422.6 million from $425 million a year earlier.
Tonnage declines that began in the last quarter of 2006 slid into this year, too.
In a conference call with analysts Wednesday, Bob Davidson, Arkansas Best president and chief executive officer, said all three months saw dips of between 4.5 and 6.5 percent.
So far, he said April didn't look much better than March.
Arkansas Best continues to implement its new Regional Performance Model offering next-day and second-day delivery in most of its markets at an annual cost of $20 million.
Expanding the new service in the middle of what looks to be an industrywide slowdown in freight demand is challenging, Davidson said, but he still expects the RPM to payoff in revenue in the longterm.
"Arkansas Best's biggest problem is increased competition from UPS and FedEx in the long-haul arena," Deaton said. "It's a good move to go to next-day regional service, but it comes at a cost and will impact their quarters."
Notable
"The core fundamentals haven't changed much. Pricing has stayed stable which they're known for. You can't control volume. It's sluggish right now and there aren't many signs of improvement." Neal Deaton, Stephens Inc. associate analyst.
"With less than a year left before the expiration of ABF's labor agreement, we feel our conservative financial position is appropriate at this time. Our liquidity and financial situation puts us in an excellent position to take advantage of opportunities that might arise in contract negotiations, including solutions to deal with the underfunded, multiemployer pension plan." Judy McReynolds, Arkansas Best chief financial officer.
By The Numbers
1.62 million -- The number of shares Arkansas Best has repurchased since January 2003 for a total cost of about $56.8 million, according to the company.
15 cents -- Dividend to be paid on May 22 to Arkansas Best shareholders of record on May 8, according to the company.
Former Yellow Corp. boss dies at 80
George E. Powell Jr., who turned a drowning Overland Park trucking company into one of the biggest LTL fleets in North America has died at 80 years old.
Powell was the chairman of Yellow Freight System Inc. He was with the company for 40 years, being named president in 1957. He retired as chairman in 1996.
Today, Yellow is YRC Worldwide Inc., named so after a landmark acquisition of rival Roadway Express a few years ago. Since then, it has become one of the largest LTL and logistics companies in the world, and is one of the few carriers to operate in China.
"It’s fair to say YRC Worldwide would not exist if it hadn’t been for Mr. Powell," YRC’s chairman and CEO Bill Zollars told the Kansas City Star. "It was under his leadership that the company took off and began to expand."
Powell and his father, along with a group of investors, bought Yellow Transit Co. out of bankruptcy in 1952. The company excelled in the years after deregulation to become one of the biggest LTL networks in the U.S. and Canada.
Powell was the chairman of Yellow Freight System Inc. He was with the company for 40 years, being named president in 1957. He retired as chairman in 1996.
Today, Yellow is YRC Worldwide Inc., named so after a landmark acquisition of rival Roadway Express a few years ago. Since then, it has become one of the largest LTL and logistics companies in the world, and is one of the few carriers to operate in China.
"It’s fair to say YRC Worldwide would not exist if it hadn’t been for Mr. Powell," YRC’s chairman and CEO Bill Zollars told the Kansas City Star. "It was under his leadership that the company took off and began to expand."
Powell and his father, along with a group of investors, bought Yellow Transit Co. out of bankruptcy in 1952. The company excelled in the years after deregulation to become one of the biggest LTL networks in the U.S. and Canada.
USF Holland names John O'Sullivan as president
HOLLAND -- Just two years after leaving USF Holland for the top financial job at corporate parent YRC Regional Transportation in Akron, Ohio, John O'Sullivan is moving back.
He returns to become president of the 10,000-strong West Michigan trucking company. He plans to relocate his family to Laketown Township within the next month.
"I am extremely pleased to be returning to the area," O'Sullivan said Wednesday, when his promotion was announced.
He succeeds Bob Zimmerman as president.
Zimmerman, who led the company two years, resigned to pursue personal interests.
It already has been a big week for O'Sullivan and USF Holland.
On Tuesday, he was in Orlando, Fla., to accept the Carrier of the Year, Midwest region, award for USF Holland at the NASSTRAC Logistics Conference and Expo.
An accountant by training, O'Sullivan, 47, has worked in the trucking industry for 15 years. He is a native of New York and a graduate of Syracuse University, but said he is a big fan of his adopted neighborhood around Holland.
"The first time I went over the dune in Lake Michigan and looked out, it took my breath away," he said.
His biggest challenge at the helm of USF Holland is keeping it on track.
"It's really maintaining the service excellence we've been maintaining for 78 years," he said.
The company was founded in Holland in 1929.
Now, its revenue tops $1.5 billion annually, handling 9,000 trailers and 5,400 tractors.
It has a stable group of drivers with turnover only about 4 percent a year, O'Sullivan said.
USF Holland, USF Reddaway, USF Glen Moore and New Penn form YRC Regional Transportation.
The holding company, YRC Worldwide Inc., is based in Overland Park, Kan., with Yellow Transportation, Roadway, Reimer Express and Meridian IQ along with the group including USF Holland.
He returns to become president of the 10,000-strong West Michigan trucking company. He plans to relocate his family to Laketown Township within the next month.
"I am extremely pleased to be returning to the area," O'Sullivan said Wednesday, when his promotion was announced.
He succeeds Bob Zimmerman as president.
Zimmerman, who led the company two years, resigned to pursue personal interests.
It already has been a big week for O'Sullivan and USF Holland.
On Tuesday, he was in Orlando, Fla., to accept the Carrier of the Year, Midwest region, award for USF Holland at the NASSTRAC Logistics Conference and Expo.
An accountant by training, O'Sullivan, 47, has worked in the trucking industry for 15 years. He is a native of New York and a graduate of Syracuse University, but said he is a big fan of his adopted neighborhood around Holland.
"The first time I went over the dune in Lake Michigan and looked out, it took my breath away," he said.
His biggest challenge at the helm of USF Holland is keeping it on track.
"It's really maintaining the service excellence we've been maintaining for 78 years," he said.
The company was founded in Holland in 1929.
Now, its revenue tops $1.5 billion annually, handling 9,000 trailers and 5,400 tractors.
It has a stable group of drivers with turnover only about 4 percent a year, O'Sullivan said.
USF Holland, USF Reddaway, USF Glen Moore and New Penn form YRC Regional Transportation.
The holding company, YRC Worldwide Inc., is based in Overland Park, Kan., with Yellow Transportation, Roadway, Reimer Express and Meridian IQ along with the group including USF Holland.
YRC sees profit dive 97 percent
Roadway parent company cites bad weather, slowdown
YRC Worldwide Inc., the largest U.S. trucking company and parent of Roadway Express of Akron, said Thursday that first-quarter profit plunged 97 percent because of bad weather, a slowing economy and reorganization costs.
Net income was $1.3 million, or 2 cents a share, compared with $42.1 million, or 71 cents, a year earlier, the Overland Park, Kan.-based company said in a statement. YRC also cut its full-year profit forecast.
Bad weather dampened earnings by 17 cents a share, YRC said, as the carrier also battled excess trucking industry capacity and price competition spurred by a slowdown in U.S. growth.
``Our results were impacted by a weaker economy and extremely difficult operating conditions during the first quarter,'' Chief Executive Officer William Zollars said in the statement. Sales declined 1.9 percent to $2.3 billion.
The profit fell short of analysts' expectations of 40 cents a share, the average of 12 estimates compiled by Bloomberg.
For all of 2007, YRC lowered its per-share earnings forecast to a range of $4 to $4.20 on an estimated $10.2 billion in revenue, compared with its Feb. 1 projection of $4.70 to $4.90.
Shares of YRC rose 31 cents to $45.74 at 4 p.m. New York time in Nasdaq Stock Market composite trading before the company reported its earnings.
YRC Worldwide Inc., the largest U.S. trucking company and parent of Roadway Express of Akron, said Thursday that first-quarter profit plunged 97 percent because of bad weather, a slowing economy and reorganization costs.
Net income was $1.3 million, or 2 cents a share, compared with $42.1 million, or 71 cents, a year earlier, the Overland Park, Kan.-based company said in a statement. YRC also cut its full-year profit forecast.
Bad weather dampened earnings by 17 cents a share, YRC said, as the carrier also battled excess trucking industry capacity and price competition spurred by a slowdown in U.S. growth.
``Our results were impacted by a weaker economy and extremely difficult operating conditions during the first quarter,'' Chief Executive Officer William Zollars said in the statement. Sales declined 1.9 percent to $2.3 billion.
The profit fell short of analysts' expectations of 40 cents a share, the average of 12 estimates compiled by Bloomberg.
For all of 2007, YRC lowered its per-share earnings forecast to a range of $4 to $4.20 on an estimated $10.2 billion in revenue, compared with its Feb. 1 projection of $4.70 to $4.90.
Shares of YRC rose 31 cents to $45.74 at 4 p.m. New York time in Nasdaq Stock Market composite trading before the company reported its earnings.
US Labor Leaders Arrive in China
SHANGHAI, China — U.S. union leaders making a groundbreaking visit to China have denounced American corporations for opposing a draft law that aims to better protect Chinese workers.
Teamsters President James Hoffa and other leaders of the Change to Win federation of unions arrived in China's business powerhouse of Shanghai on Friday. That broke a decades-old boycott of China by U.S. labor groups, many of which still reject the country's sole Communist Party-controlled union federation.
Hoffa said the group planned to discuss U.S. companies' opposition to the draft contract labor law with the American Chamber of Commerce in Beijing. The law would require greater employer consultation with workers and make mass firings more difficult _ conditions U.S. companies say would make doing business in China overly expensive and burdensome.
"We do think the contract law is a good idea," Hoffa said. "Any attempt by American corporations to try and water that down should be discouraged and I'm very much against that."
Hoffa said the group also planned to raise with Chinese officials the cases of imprisoned Chinese independent labor leaders, including Yao Fuxin, who was sentenced to seven years in prison for leading massive 2002 labor protests.
"Any labor leader in prison should be set free," he said. "I think they're prisoners of conscience."
China permits worker organization only through the official All-China Federation of Trade Unions, which closely follows government and Communist Party orders.
Despite that, Hoffa said it was important to develop a dialogue with the 100-million member ACFTU, especially given the impact of China's sizzling export economy on the U.S.
"Yes it is more or less a union that is tied to the government, we know that, but I think a dialogue with them is, I think, constructive," Hoffa said.
"I'm interested in asking them, 'What are you doing to improve the lives of the average Chinese citizen? ... How do you improve their wages? How do you improve their health care?'" he said.
American unions, especially the mighty AFL-CIO, tend to shun contacts with the ACFTU. Critics say the Chinese union is structured to impose government policies and head off potential disputes rather than to represent worker interests.
Greg Tarpinian, executive director of Change to Win, said he thought such views were out of date.
"We are forward-looking. We are not stuck in the past," Tarpinian said. "We're dealing with reality today. We're dealing with what is practical and what is important and real for our members, for American workers."
On Friday, Hoffa visited facilities owned by transport and logistics firm YRC Worldwide Inc., formerly known as YellowRoadway, and overnight delivery firm UPS, the two largest employers of Teamster union members.
On Monday, the delegation meets with Chinese officials including Jia Qinglin, the Communist Party's No. 4 leader.
Change to Win's members have been among the most enthusiastic about establishing overseas contacts, in part because their workers have more to gain from globalization, such as the 250,000 UPS workers represented by the Teamsters.
The Teamsters traditionally represented workers in the transport industry, but has merged in recent years with printers and railway workers unions. Change to Win groups seven unions with six million members, including the United Farm Workers and Service Employees International Union, America's largest.
Teamsters President James Hoffa and other leaders of the Change to Win federation of unions arrived in China's business powerhouse of Shanghai on Friday. That broke a decades-old boycott of China by U.S. labor groups, many of which still reject the country's sole Communist Party-controlled union federation.
Hoffa said the group planned to discuss U.S. companies' opposition to the draft contract labor law with the American Chamber of Commerce in Beijing. The law would require greater employer consultation with workers and make mass firings more difficult _ conditions U.S. companies say would make doing business in China overly expensive and burdensome.
"We do think the contract law is a good idea," Hoffa said. "Any attempt by American corporations to try and water that down should be discouraged and I'm very much against that."
Hoffa said the group also planned to raise with Chinese officials the cases of imprisoned Chinese independent labor leaders, including Yao Fuxin, who was sentenced to seven years in prison for leading massive 2002 labor protests.
"Any labor leader in prison should be set free," he said. "I think they're prisoners of conscience."
China permits worker organization only through the official All-China Federation of Trade Unions, which closely follows government and Communist Party orders.
Despite that, Hoffa said it was important to develop a dialogue with the 100-million member ACFTU, especially given the impact of China's sizzling export economy on the U.S.
"Yes it is more or less a union that is tied to the government, we know that, but I think a dialogue with them is, I think, constructive," Hoffa said.
"I'm interested in asking them, 'What are you doing to improve the lives of the average Chinese citizen? ... How do you improve their wages? How do you improve their health care?'" he said.
American unions, especially the mighty AFL-CIO, tend to shun contacts with the ACFTU. Critics say the Chinese union is structured to impose government policies and head off potential disputes rather than to represent worker interests.
Greg Tarpinian, executive director of Change to Win, said he thought such views were out of date.
"We are forward-looking. We are not stuck in the past," Tarpinian said. "We're dealing with reality today. We're dealing with what is practical and what is important and real for our members, for American workers."
On Friday, Hoffa visited facilities owned by transport and logistics firm YRC Worldwide Inc., formerly known as YellowRoadway, and overnight delivery firm UPS, the two largest employers of Teamster union members.
On Monday, the delegation meets with Chinese officials including Jia Qinglin, the Communist Party's No. 4 leader.
Change to Win's members have been among the most enthusiastic about establishing overseas contacts, in part because their workers have more to gain from globalization, such as the 250,000 UPS workers represented by the Teamsters.
The Teamsters traditionally represented workers in the transport industry, but has merged in recent years with printers and railway workers unions. Change to Win groups seven unions with six million members, including the United Farm Workers and Service Employees International Union, America's largest.
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