A bit over a year ago, YRC Worldwide’s (YRCW - Snapshot Report) management team implemented a few new strategies to improve revenues and overall growth. The main focus was executing a freight mix and yield improvement strategy, along with enhancing safety performance. Also, as part of the strategy, the company continued to reinvest in their fleet, and invest in high return technology projects. In Q2 15, the strategy started to boost operational improvements and generate substantial progress. Specifically, operating income increased by 184.5% y/y, margins improved 320 basis points y/y, workers’ compensation expense declined by $7.8 million, and liability claims expense decreased by $6.7 million. Due to these factors, YRC Worldwide is the Zacks Bull of the Day. 
This Zacks Rank #1 (Strong Buy) is the holding company for a portfolio of less-than-truckload (LTL) companies including YRC Freight, YRC Reimer, Holland, Reddaway, and New Penn. Collectively, YRC Worldwide companies have one of the largest, most comprehensive LTL networks in North America with local, regional, national and international capabilities.
According to James Welch, CEO, “"During the second quarter of this year, we continued to see success in executing our freight mix and yield improvement strategy over market share and equally important improving our safety performance which in turn increased our operating income by $36.9 million to $56.9 million." "Additionally, we 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. We are accomplishing all of this while improving our liquidity," continued Welch. "However, as we move forward, we must continue to invest in our most valuable asset, our employees, through continuous training, employee engagement strategies and communication. We believe these investments will help drive productivity, service and quality improvements and allow us to continue to build on our current operating momentum and results," concluded Welch.
Increasing Estimates
Over the past four quarters, YRC Worldwide, has beaten the Zacks Consensus Earnings Estimate three out of the four quarters with an average positive surprise of 142.6%. Further, the current Zacks Consensus Earnings Estimate for Q3 15 indicates a 1,716.7% y/y growth in EPS!
The 2 tables below show estimate revisions, and the change in overall estimates. As you can see there have been significant upgrades for YRC Worldwide for the remaining quarters in 2015, and FY 16. This is due to their new strategy and its positive impact it had on the company in Q2 15.
As you will notice, estimates for Q3 15, Q4 15, FY 15, and FY 16 have all significantly improved over the past 30 days. Q3 15 improved from $0.32 to $0.49, Q4 15 rose from $0.22 to $0.31, FY 15 jumped from $0.24 to $1.04, and FY 16 surged from $1.34 to $1.92.
Bottom Line
As management’s strategy to enhance freight mix, and yield improvements over market share takes hold, operating income and margins are showing exceptional growth. Further, this focus by management has caused earnings estimates to climb, which looks to deliver solid growth into 2016.
Bottom Line
As management’s strategy to enhance freight mix, and yield improvements over market share takes hold, operating income and margins are showing exceptional growth. Further, this focus by management has caused earnings estimates to climb, which looks to deliver solid growth into 2016.
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