YRC Worldwide stock jumps on expectation of improved second quarter

YRC Worldwide Inc. expects significant improvement in the second quarter as internal cost-saving initiatives, such as the integration of two subsidiaries, take effect.

Integrating Yellow Transportation and Roadway is expected to mean about 1,000 more job cuts in the second and third quarters.

Bill Zollars, CEO of the Overland Park-based trucking company (Nasdaq: YRCW), presented the information at a JPMorgan Aviation and Transportation Conference on Wednesday. Around 2 p.m., YRC’s stock was trading at $2.76, up 76 cents, or 38 percent, according to Yahoo Finance.

At the end of 2008, Yellow and Roadway had 521 facilities, 37,000 employees and 16,700 trucks. Around the March 1 integration, about 2,000 employees and 70 facilities were cut. By the end of the year, the combined unit is expected to have 430 facilities, 34,000 employees and 14,000 trucks.

YRC also countered what it described as concerns about employee morale from “questionable sources.” Voluntary turnover by nonunion employees dropped to 1.2 percent in the first quarter of 2009, compared with 2.2 percent in the first quarter of 2008. An anonymous nonunion employee survey from Feb. 17 showed nearly 60 percent of employees were more optimistic than last year and about 75 percent think the CEO is improving the company.

Zollars pointed out that union employees, who represent about 70 percent of the company’s work force, had approved pay cuts by a 77 percent margin.

This year, YRC expects an additional $100 million in proceeds from excess property, as well as significant sale-leaseback deals, including more than $270 million finalized or under contract, the presentation said.

Without economic recovery, the company expects to save $500 million going into 2010 from the integration and from union and nonunion pay cuts, traded for ownership stakes in the company.

However, YRC didn’t give any indication that the long-struggling freight industry was recovering and said its first-quarter results would be disappointing. The economy shows no significant signs of imminent improvement, and volume drops have sped up throughout YRC business units as the economy hits customers. Some volume decreases have come from YRC’s efforts to shed less profitable customers.

YRC ranks No. 2 on the Kansas City Business Journal’s list of area public companies.