Shares of YRC Worldwide Inc. (NASDAQ:YELL) fell as much as 17.6% on Friday after the shipping company reported first-quarter earnings. At 11:20 a.m. EDT, the stock was still down 15.6% for the day.
Operating revenue was up 4.5% to $1.17 billion for the quarter but net loss more than doubled to $25.3 million, or $0.78 per share. Adjusted for one-time items, the loss was $0.70 per share, which still fell way short of the $0.27 loss analysts expected.
Volume was up in the quarter but revenue per hundredweight was down 1.7% in the YRC freight segment, which drove the poor results. Regional transportation only saw a 0.2% increase in revenue per hundredweight excluding fuel surcharge, which wasn't enough to return to profitability.
The first quarter is seasonally weak for YRC Worldwide, but its margin profile is so poor that investors shouldn't be jumping on the bandwagon today. I don't see any pricing power in the business, and it seems that results are unpredictable quarter after quarter. Shipping just isn't an attractive place for investors right now, and that's why the discount from last quarter and today doesn't give me any confidence in the company's future.