Why YRC Worldwide Shares Jumped 27%

By Markets Fool.com

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What: Shares of trucking company YRC Worldwide soared 27% today after its quarterly results impressed Wall Street.

So what: YRC shares have been crushed in 2015 on demand weakness in the freight division, but today's wide bottom-line beat -- EPS of $0.80 versus the consensus of just $0.31 -- reignites optimism on Wall Street that the worst is behind it. The company has been trying to stave off bankruptcy for the past several years, so while the top line continues to decline (revenue fell 4.55% over the year-ago period), analysts are interpreting today's results as a sign that management's turnaround initiatives are indeed taking hold.

Now what: YRC had a cash balance of $196 million as of June 30, versus just $171 million in the year-ago period, giving investors even more reason to be optimistic. "[W]e continued to reinvest in our fleet, make incremental investments in high-return technology projects and are nearing completion of the in-cab safety solutions pilot for our existing fleet," said CEO James Welch. "We are accomplishing all of this while improving our liquidity." When you couple YRC's still highly speculative nature with its suddenly hot stock price, however, conservative Fools might want to stay on the sidelines.

The article Why YRC Worldwide Shares Jumped 27% originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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