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Yellow Corp. posted its best first-quarter results in six years as losses narrowed and revenue increased, the company announced May 10.
The Overland Park, Kan.-based less-than-truckload carrier reported a net loss of $27.5 million, or negative 54 cents per share, compared with a net loss of $63.3 million, or negative $1.26, in the same period of 2021. Wall Street analysts had expected a loss of 41 cents per share.
Revenue increased 5.2% to $1.26 billion compared with $1.19 billion a year ago. Wall Street’s forecast was $1.3 billion.
Operating ratio improved year-over-year by 300 basis points, to 99.3 from 102.3 a year ago. Operating ratio measures expenses as a percentage of revenue and determines efficiency. The lower the ratio, the more ability the company has to make a profit.
Yellow said Q1 tonnage declined by 20.1% compared with year earlier. Broken down by months, tonnage fell nearly 16% in January, and February saw a 27.4% decline. March was down nearly 18% and, so far in Q2, April was off 14-15%.
The company noted, however, that pricing on contracts that were renewed in April were up about 10% to 11%.
Much of the tonnage declines were attributed to a spike in COVID-related employee absences along with winter weather in February that forced Yellow to limit shipments at some terminals.
“While the first two months of the quarter presented some unique challenges, I’m proud of our employees for finishing on a strong note in March to partially offset the challenges we encounter,” President Darrel Harris said on a conference call with reporters and investors. “We remain pleased with our progress but not satisfied with our results. The Yellow team managed through a challenging first quarter, and stays focused on safely meeting the needs of our customers.”
CEO Darren Hawkins said. “As we transform the network to operate as a super-regional carrier, we expect to be more agile and recover more quickly from extreme weather events. We also fully expect to return to growing LTL tonnage per day.”
Harris elaborated on the plan to transform Yellow into what leaders are calling a “super-regional” carrier, whereby all of Yellow’s separately run LTL carriers and logistics company will operate on the same technology platform.
“We will complete the transition to a super-regional carrier around the end of the year in three phases,” he said. “We have completed the planning and analysis of the first phase to integrate our linehaul network in our pickup and delivery operations. We expect phase one to be implemented this summer in the western part of the U.S., which has the lowest execution risk profile. This will include the optimization of 89 legacy YRC freight and Reddaway terminals.”
Recently, Yellow filed change of operations requests with the Teamsters union to consolidate 20 YRC Freight and Reddaway terminals and realign its delivery and pickup network. The plan will result in the closure of nine facilities.
Reddaway, based in Tualatin, Ore., is a Yellow LTL subsidiary. The transportation and logistics holding company operates in the western United States, Alaska, Hawaii and British Columbia.
Phase two is expected to take place within its regional LTL carrier, New Penn, in the summer, and it will reorganize terminals in the Midwest and Northeast. Phase three with carrier Holland is planned to begin in the fall and will focus on the Southeast and central U.S.
Once the reorganization is complete, Yellow expects its terminal count to be in the 300 range by year-end, down from the current 316.
Yellow ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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