Losses doubled in the third quarter for YRC Worldwide (YRCW), the trucking company undergoing a restructuring to avoid bankruptcy.
The stock closed at 6 cents on Thursday. On Friday, the shares were down 0.0083 cents, or 14%, to� just more than 5 cents.
Revenue rose 12% to $1.28 billion with more tons shipped and more shipments. But the company reported a loss of $119.8 million from continuing operations net of tax, or 51 cents per share, versus a loss of $61.7 million, or $1.33 per share, in the same period a year ago. Analysts were looking for a loss of 36 cents per share.
The company issued more than a billion new shares in September, diluting shareholders and driving down the stock price. A reverse share split is planned by year end, pending shareholder approval.
Stifel Nicolaus analysts David Ross and J. Bruce Chan upgraded the stock from Sell to Hold Friday, saying there is “limited near-term downside from here.” But they added that they may recommend selling by year’s end:
“The company should do at least a 1:333 split, which, at yesterday’s closing price, would take the share price to roughly $20 (while simultaneously dramatically reducing the number of shares outstanding, not changing the equity value) [ Stifel's emphasis]… we expect to be sellers of YRCW again post-split, as the company still has no current equity value and a financial mess out of which it needs to work, and having the big shipper problem … is not helping them get the rate increases they need to improve profitability … On a positive note, the company’s new CEO is an industry and company veteran who has been well received by the workforce to date … and is appropriately focused, in our opinion, on ‘fixing’ YRC National, as we believe that is the key to the whole story.”
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