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Yellow Corp. increased revenue but earnings declined during the third quarter, the company reported Nov. 2.
The Overland Park, Kan.-based truckload motor carrier posted net income of $4.8 million, or 9 cents per diluted share, for the three months ending Sept. 30. That compared with $8.3 million, or 16 cents, during the same time the previous year. Total operating revenue increased 4.5% to $1.36 billion from $1.3 billion.
“For the sixth consecutive quarter, revenue and operating income improved on a year-over-year basis,” Yellow CEO Darren Hawkins said. “Operating income improved despite a $19.4 million increase in third-party liability claims expense compared to a year ago, mostly due to unfavorable development of prior-year claims, including the resolution of several of our most significant outstanding claims.”
Yellow reported that total current liabilities reached $843.8 million by Sept. 30. That compared with $824.1 million by the end of last year. Wages, vacations and employee benefits accounted for the largest expense at $257.5 million, compared with $252.5 million in 2021. Claims and other liabilities reached $263.8 million by Sept. 30 compared with $275.7 million by the end of last year.
“We continue to closely manage purchase transportation expense and as a percentage of revenue; it was the lowest it has been in more than two years,” Hawkins said. “While demand for capacity is moderating compared to the elevated levels over the past several quarters, the LTL pricing environment remains favorable.”
Yellow implemented phase one of its network optimization in the Western region of the country toward the end of the quarter. Phase one included integrating 89 legacy YRC Freight and Reddaway terminals to operate as a super-regional network.
“The early results are meeting expectations, and customers benefit by having one driver pick up and deliver both regional and longhaul shipments,” Hawkins said. “We remain focused on applying lessons learned from phase one and integrating the rest of the network around the end of the year.”
Hawkins expects the network optimization to lead to improved asset utilization, enhanced network efficiencies, cost savings and to create capacity without the need to add new terminals.
“In October, we enhanced the company’s liquidity by extending the maturity of the ABL facility from January 2024 to January 2026,” Hawkins said. “We also increased the size of the facility from $450 million to $500 million and reduced the fixed portion of the interest rate by 50 basis points. Executing this extension reflects the improving financial performance of the company and is an important first step on the path to refinancing our capital structure.”
Yellow reported that less-than-truckload revenue per hundredweight during the quarter increased 24.6% including fuel surcharge. LTL revenue per shipment increased 22.4% compared with the same period in 2021, but LTL tonnage per workday decreased 16.2% when compared with a year ago.
Operating ratio declined slightly to 96.4 from 96.3 during the same time last year. Operating ratio shows management’s cost efficiency while generating revenue. The smaller the ratio, the more efficient the company is.
Yellow Corp. ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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