Yellow Roadway Boosts Profit Projections

Confidence is running high at Yellow Roadway Corp. as the company increased its earnings outlook for the second quarter to between 85 and 90 cents per share, up from its previous estimate of 70 to 75 cents per share.

The boost in the company’s earnings projections is due to two things, said Yellow Roadway’s chairman, president & CEO Bill Zollars: high productivity coupled to favorable economic conditions. “All our business units continue to perform very well,” he said.

The rosy earnings predictions follow strong earnings in the first quarter. Yellow Roadway posted 1Q earnings of $18.2 million, trumping Yellow’s 1Q 2003 earnings of $5.6 million three-fold before it merged with Roadway Express. Operating revenue also increased in 1Q by 7.7% to $1.55 billion over pro forma 1Q 2003 as overall LTL tonnage jumped 2.2%. Those numbers follow a 4Q 2003 loss Yellow had to post due to the expense associated with its $1.05 billion purchase of archrival Roadway, announced late last year.

Yet a corner seems to have been turned, due in no small measure to a recovering national economy creating high demand for trucking services. “Yields are up because of the reduced capacity in the market,” analyst Robert Persuit of S.J. Consulting told Fleet Owner.