Why YRC Worldwide Inc's Shares Crashed Today

By Travis Hoium Markets Fool.com

What happened

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Shares of shipping company YRC Worldwide Inc (NASDAQ: YRCW) plunged as much as 19% in trading Tuesday after reporting fourth-quarter earnings. At 3:00 p.m. EST, shares were still down 14.7% on the day.

So what

Revenue rose slightly, to $1.15 billion, but the company reported a net loss of $75.3 million, or $0.23 per share, before comprehensive income. Results included a non-union pension settlement charge of $28.7 million, which made the loss larger than it would have been otherwise. Operating income actually swung from a loss of $15.3 million a year ago to a profit of $14.9 million, so there were some signs of improvement.

Image source: Getty Images.

What hit results was an "other comprehensive loss" of $67.8 million versus a gain of $69.6 million a year ago. The loss didn't overshadow the loss of $7.5 million from regular operations, but it didn't help, either.

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Now what

YRC Worldwide seems to be at best treading water and at worst, drowning, as shipping prices decline in its end markets. Given the trajectory of earnings, I don't see a lot of reason to be bullish on the stock today.

Until volume or prices pick up, YRC Worldwide will be under a lot of pressure financially. With $980.3 million in long-term debt, I don't think the upside for the stock is worth the risk.

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Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.