Wednesday, April 08, 2009

YRC sees up to $185 mln in charges; stock plummets

U.S. truck firm YRC Worldwide Inc said on Tuesday it expects to report first-quarter charges of up to $185 million due to ongoing restructuring of its network and the faltering U.S. economy, sending its shares down 20 percent.

In a regulatory filing with the U.S. Securities and Exchange Commission, YRC said the charges include severance pay and pension settlements.

The Overland Park, Kansas-based company also said that daily freight tonnage in its U.S. national network was down 29 percent in the first quarter from a year earlier.

The U.S. trucking sector has suffered from weak freight volumes since the third quarter of 2006 due to a combination of weak retail and auto sales, the meltdown of the housing sector and the decline of the overall economy.

This has forced truckers to slash prices to compete for business.

YRC has had additional problems of its own because of over-capacity in its network following a couple of big acquisitions in 2003 and 2005.

The company has slashed jobs, closed facilities and its unionized workers agreed to more flexible conditions. They approved a 10 percent wage cut in January in return for 15 percent stake in the company.

In February the company also finalized an amendment with its lenders on its credit facilities, a step seen by analysts as crucial to avoiding collapse.

In its filing on Tuesday, YRC said it expects to have 400 facilities by the end of 2009, compared with 521 at the end of 2008.

The company plans capital expenditures of $130 million, and said they could reach a maximum of $150 million.

YRC said it still expects to raise around $100 million in excess property sales in 2009, with $18 million raised in the first quarter.

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