Why This Transportation Stalwart Isn't Built to Last

It's true: Comprising 14,700 owned and leased tractors, and some 45,800 trailers, the combined fleets of YRC Worldwide's Freight and Regional Transportation divisions make this company a true transportation stalwart -- one of the biggest trucking companies in the nation.

But how long will that remain true?

The bull case for YRC

In an ideal world, YRC's huge size should bring with it revenue riches, enviable efficiencies of scale, and beaucoup profits. In reality, only one of these is true. With $5.1 billion in trailing revenues, the company is nearly as big as trucking rivals Old Dominion Freight and ArcBest Corporation combined. Yet YRC's minuscule operating profit margin (just 0.7%) is worse than either of these companies', and YRC ended 2014 in the red with an $86 million net loss.

Still, some investors see hope for the company. In a mostly positive article on YRC's "turnaround," CFO magazine praised YRC in February for engineering a return to "positive net income" in Q3 2014, "even if it was just $1.2 million and enabled by a $4.4 million net operating loss carryforward. In the fourth quarter net income climbed to $6.2 million, and full-year 2014 operating earnings surged."

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