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What: Shares of trucking company YRC Worldwide Inc. jumped as much as 13% in early trading today after the company announced earnings. Shares settled to about a 4% gain midday.
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So what: Fourth-quarter revenue for YRC was up slightly to $1.22 billion, with net income of $6.4 million, or $0.16 per share. The results easily topped Wall Street's expectation of a $0.26-per-share loss in the quarter.
Now what: The improved results were driven by increased utilization during the quarter, not falling fuel prices. In fact, management said that falling fuel prices would be a headwind because fuel surcharges will be down as long as energy prices stay low. It's certainly a positive that YRC Worldwide could swing to a profit in the fourth quarter, but given the $185.5 million comprehensive loss for the year and the fact that margins are still extremely low, there's just too much risk in this shipping business for me to be a buyer today.
The article Why Shares of YRC Worldwide Inc. Popped Today originally appeared on Fool.com.
Travis Hoium 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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