Shares of trucking giant YRC Worldwide Inc. lost nearly 18 percent of their value Wednesday after the company reported a smaller net loss in the second quarter but poorer operating results than a year ago.
The stock dropped $5.06, or 17.7 percent, and closed at $23.52. It was the lowest closing price in more than a month.
Part of the trucking company’s operating setback came from reworking its network of terminals during the quarter. The move led to some unexpected costs and disruptions but will cut costs substantially in the future.
YRC chief executive James Welch said the stock’s reaction might reflect its sharp run-up this year, which included some “fast money” and the emotion that can drive markets.
The Overland Park company’s net loss equaled $15.1 million, or $1.72 a share, compared with losses of $22.6 million, or $3.21 a share, in the same period last year. Revenues dipped to $1.24 billion in the three months that ended June 30, compared with $1.25 billion a year ago.
Ignoring the company’s interest payments, YRC operated at a profit of $14.3 million compared with $15.5 million a year ago. The company said the year-ago number benefited from gains on the sale of unused assets.
Operating losses at its biggest subsidiary, YRC Freight, increased in part from its shuttering of unused terminals and other changes that the company called the “second largest network optimization” in its history.
The changes, which cost $6.3 million, involved 10 percent of its terminals and moved hundreds of employees. It also coincided with a surge in business in late May as well as workers’ holiday and vacation schedules.
It left the company with extra work and “a little bit short of people,” Welch said.
YRC Freight expects to save $25 million to $30 million a year from the changes designed to make its operations more efficient.
“The benefits from this change were so great we had to go through with it when we could,” Welch said.
YRC Freight also leased some new tractors and trailers and made other investments in equipment.
During a call with analysts, executives ducked questions about how much they’re spending on fleet equipment but did settle one question.
The company had filed what is called a shelf registration with the Securities and Exchange Commission. It allows the sale of $350 million of stock or bonds to raise money but doesn’t set a date for any sale.
Chief financial officer Jamie Pierson told analysts that such filings are customary should the opportunity to raise money come up. Its previous such filing expired last year. YRC Worldwide is, however, working on plans to possibly refinance some of its debt coming due next year and in 2015, Pierson said.