Friday, July 28, 2006

YRC Worldwide Q2 Earnings Rise

Thursday after the bell, YRC Worldwide Inc. reported second quarter earnings that increased from last year and comprehensively beat analysts' estimate as a result of a combination of strong execution of its strategies, cost initiatives, and a good economy. The company's quarterly revenue increased 23% from last year. The company reiterated its full year 2006 revenue and earnings forecast for the full year 2006.

The Overland Park, Kansas-based transportation service provider reported net income for the second quarter of $92.3 million or $1.58 per share, compared to $76.1 million or $1.38 per share for the year-ago quarter.

The current year second quarter net income includes $0.04 per share related to reorganization expenses and net gains on property disposals.

Adjusted earnings for the second quarter were $1.62 per share, compared to $1.40 per share in the prior year quarter.

On average, 11 analysts polled by First Call / Thomson Financial expected the company to earn $1.55 per share for the second quarter.

Operating income for the second quarter increased to $172 million from $136 million a year ago, while adjusted operating income increased to $177 million from $138 million last year.

YRC said operating revenue for the second quarter rose 23% to $2.57 billion from $2.09 billion in the same quarter last year. Four analysts had consensus revenue estimate of $2.56 billion for the company's second quarter.

Bill Zollars, Chairman, President and CEO of YRC Worldwide, said, "Our highest ever quarterly earnings per share of $1.62 was more than our revised guidance of $1.53 to $1.58, as all of our business units performed better than expected late in the quarter."

Second quarter revenue for YRC Regional Transportation rose to $654.1 million from $314.5 million a year ago, while Yellow Transportation revenue increased 4.1% to $885.9 million from $851.2 million last year.

Second quarter Roadway revenue grew 5.5% to $876.9 million from $830.9 million last year and Meridian IQ revenue increased to $153.6 million from $95.6 million in the last year's second quarter.

For the first-half of the year, the company reported net income of $134.4 million or $2.29 per share, compared to $126.0 million or $2.34 per share for the same period last year.

Adjusted earnings for the first-half were $2.34 per share, compared to $2.32 per share in the prior year period.

Operating revenue for the first-half grew 31% to $4.94 billion from $3.77 billion in the corresponding period last year.

Looking forward, the company expects third quarter earnings to be in the range of $1.70 to $1.80 per share. Analysts currently expect the company to earn $1.74 per share for the third quarter.

For the full year 2006, the company continues to expect operating revenue of $10 billion and earnings of $5.65 to $5.85 per share. Analysts currently expect the company to earn $5.58 per share on revenue of $10.19 billion for the full year 2006.

Among the company's competitors, Con-Way Inc. last week reported higher-than-expected second quarter earnings, citing a solid pricing environment and rising margins.

YRC shares, which are trading in the range of $36.07 to $55.15 in the last one year, closed Thursday's regular trading session at $41.61, down 40 cents and lost an additional $1.11 or 2.67% in after hours trading.

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