Zollars Sees Some Improvement

The head of transportation and logistics company YRC Worldwide Inc. said Wednesday that he has started seeing some bright spots in the economy but that the overall environment is "still a bit like crawling over broken glass."

Meanwhile, YRC's shares followed other trucking stocks in a downward spiral after several analysts said first-quarter earnings reports likely will be worse than expected, as harsh winter weather compounds weak demand and record fuel prices.

YRC shares on Wednesday fell 85 cents, or 6.9 percent, to $11.40, below the previous 52-week low of $11.77.

Bill Zollars, chief executive of the Overland Park, Kan.-based company, told analysts at a conference sponsored by JP Morgan and broadcast over the Internet that YRC's attempts to restructure its troubled regional trucking business are starting to gain traction, although he also cautioned it was early in the process.

YRC, the nation's largest less-than-truckload carrier, last month said it was closing 27 service centers for its USF Reddaway and USF Holland brands and eliminating 1,100 jobs as it tried to give the struggling carriers smaller regions to work in.

"We've seen some pretty significant impacts," Zollars said. "Reddaway has snapped back almost immediately from the return to their normal market. Holland has also shown signs of improvement although that's going to take a little bit longer."

Less-than-truckload carriers combine shipments from multiple customers into a single load.

Zollars said he has noticed increased weakness from retail customers and that the overall economy hasn't changed in recent months, although he added that severe winter weather has made it difficult to gauge the exact health of the economy. He said the company has had better luck getting price increases as it renews shipping contracts with customers and has seen an uptick in the weights per shipment, which he said has typically pointed to economy recovery in the past.

"It's too early to call that as we haven't seen that across all companies, but that increase in weight per shipment is an encouraging sign and one we didn't have several months ago," he said.

Zollars' comments came after Baird analyst Jon A. Langenfeld cut his per-share annual earnings estimate for YRC from $1.25 to $1, noting that severe weather and fuel costs are driving up expenses across the industry. He didn't change his expectation that YRC will lose 20 cents per share in the first quarter.

Analysts surveyed by Thomson Financial expect annual earnings of $1.49 per share and a first-quarter loss of 17 cents.