Shares of YRC Worldwide Inc. fell 17 percent Friday after the company reported second-quarter results after the market closed Thursday.
The Overland Park-based trucking business trimmed its losses from a year ago, but not as much as expected. One problem was higher costs the company incurred to handle an unexpected boost in shipments.
YRC’s stock was down 22 percent at midday before coming back a bit. It closed at $21.72, down $4.46.
A Bloomberg News roundup of analysts’ reports noted that higher revenues from price increases and greater volumes were eaten up in part by cost overruns.
At the company’s national freight operation, called YRC Freight, extra costs included adding and training part-time dockworkers and hiring other transportation companies — both on the road and rails — to keep up.
Chief executive James Welch said Friday that the added business was welcome but pushed the company off its most efficient schedules for handling and shipping freight. YRC Freight had similar problems getting out of cycle during harsh winter weather but had gotten back to an efficient operation.
Financial results also would have been better, Welch said, had the company been more aggressive in negotiating higher prices with customers, though it did gain increases.
One number in particular disappointed analysts. It’s an approximation of the cash produced from operations called EBITDA, which stands for earnings before interest, taxes, depreciation and amortization.
Welch said analysts’ EBITDA estimates had ranged widely, between $58 million and $100 million, suggesting an overall expectation of about $80 million. The total YRC Worldwide reported was $63 million.
Welch attributed part of the shortfall to higher cargo claims and costs from bodily injury claims, for example from accidents involving company trucks, including claims from prior years that landed in the second quarter’s results.
“We got zapped with those in the second quarter,” Welch said, otherwise “we’d have been sniffing that $80 million.”