OVERLAND PARK, Kan. (July 18 2003) — As it prepares for a merger with newly-acquired competitor Roadway, Yellow Corp. announced yesterday it tripled its profits during the second quarter of this year.
North America’s largest freight carrier reported net income of $18.4 million, or 62 cents a share, for the period ending June 30, compared with $6.2 million for the same quarter a year ago. Revenue was $713.4 million, up 10.4 per cent from last year’s $646.1 million.
Bill Zollars, chairman and CEO, said the company was able to make such large strides in profit growth via cost management and yield management. He also said Yellow is enjoying favorable comparisons due to Consolidated Freightways declaring bankruptcy last September. The extra business brought Yellow an extra $300 million in sales, Zollars said.
The company also expects increased profit next year due to the Roadway acquisition. The joint subsidiary, which will be named Yellow-Roadway Corp., should realize cost savings of $45 million to $125 million within the first 12 months, and sales will jump from $6 billion to $8 billion, Zollars said.
Yellow announced last week it will buy Roadway Corp. for $966 million. Yellow will also assume an expected $140 million in net Roadway indebtedness, bringing the enterprise value of the acquisition to $1.1 billion.
–with files from AP
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