Friday, September 09, 2005

Yellow Roadway cuts guidance on Katrina damage

Transportation company Yellow Roadway Corp. lowered its guidance for the quarter on Thursday, blaming disruptions caused by Hurricane Katrina and problems integrating new procedures at its Roadway Express division.
The Overland Park-based company said third quarter earnings would range from $1.40 to $1.45 per share, well below the company's earlier expectations of $1.60 to $1.65 per share. Yellow said it would update its annual earnings figures when it releases the earnings next month.
Analysts surveyed by Thomson Financial expected quarterly earnings of $1.63 per share, and a full-year profit of $5.44.
Yellow estimated disruptions from Katrina would have a 5 cent per share effect on earnings, although the company added "the situation continues to unfold."
The bulk of the setback, however, was blamed on the company putting new operational procedures in place at Roadway Express and "the associated learning curve that negatively affected efficiency."
The company also announced that Roadway President Robert L. Stull was retiring after 28 years at Yellow and would be replaced immediately with Michael J. Smid, who has held several positions at the company.
Yellow released the new guidance after the markets closed Thursday. Its shares fell 5.2 percent, or $2.41 in after-hours trading after ending regular trading 55 cents lower at $46.01 on the Nasdaq Stock Market.
Yellow shares have traded between $43.31 and $64.47 over the past year.