YRC claims it's solid despite share dive

North America's largest trucking company YRC Worldwide earlier this week insisted that it has a solid financial position and can pay down its debts after its share price plunged 30 percent on the Nasdaq, Reuters reported.

Chief executive Bill Zollars said in a statement that with over US$9 billion in annual revenue, coupled with the company's comprehensive networks, their financial position is solid enough to weather the current economic environment.

Some analysts have raised questions about the less-than-truckload (LTL) company's ability to meet its debt covenants in a deteriorating economic environment. LTL operators consolidate smaller loads into a single truck.

Like the rest of the US trucking sector, YRC's business has been hit by a combination of a crumbling housing sector together with weak retail and auto sales.

With demand on the wane, many trucking companies have been forced to compete by lowering their prices to get business.

LTL operator Con-way Inc slashed its full-year earnings outlook last week, citing a "battered" economy and a fiercely competitive pricing environment.

But YRC has also had problems of its own. After struggling for several quarters, the LTL giant instituted a restructuring programme at the beginning of this year that cut 1,100 jobs and shut a number of service centres at two poorly performing regional units.