Executive Summary

Q3 2022 operating revenue was $1,360.4 million and operating income was $49.1 million; net income was $4.8 million ($0.09 diluted EPS). Adjusted EBITDA was $90.6 million, down modestly YoY from $94.4 million despite higher pricing and lower purchased transportation costs .
Network optimization Phase One was implemented in September across 89 western U.S. terminals to build a super‑regional LTL network; management cited early results meeting expectations and ongoing rollout by year‑end .
Liquidity actions: in October, the ABL facility maturity was extended from January 2024 to January 2026, size increased to $500 million, and the fixed portion of the interest rate was reduced by 50 bps—an “important first step” toward refinancing the capital structure .
Volume headwinds: LTL tonnage per workday fell 16.2% YoY, but strong yield drove LTL revenue per hundredweight up 24.6% including fuel surcharge (12.8% ex‑fuel) .
Guidance: 2022 capital expenditures were lowered to $210–$230 million (from $250–$300 million prior), reflecting OEM production constraints; capex was $68.1 million in Q3 .

What Went Well and What Went Wrong

What Went Well

Strong pricing/yield trends: LTL revenue per hundredweight rose 24.6% YoY including fuel surcharge (12.8% ex‑fuel) and revenue per shipment increased 22.4% (10.9% ex‑fuel), supporting YoY increases in operating revenue and income despite volume declines .
Cost discipline: Purchased transportation expense as a percentage of revenue was “the lowest it has been in more than two years,” aiding margin resiliency even as third‑party liability claims rose .
Network transformation execution: “In September, we successfully implemented phase one of the network optimization in the western United States… integrating 89 legacy YRC Freight and Reddaway terminals to operate as a super‑regional network,” with early results meeting expectations; full integration targeted around year‑end .
Management quote: “For the sixth consecutive quarter, revenue and operating income improved on a year-over-year basis… While demand for capacity is moderating… the LTL pricing environment remains favorable” .

What Went Wrong

Volume pressure: LTL tonnage per workday decreased 16.2% YoY and shipments per workday fell 14.8% YoY, contributing to operating ratio of 96.4% vs 96.3% in the prior year .
Claims expense: Operating income improvement occurred “despite a $19.4 million increase in third‑party liability claims expense compared to a year ago,” including resolution of several significant prior‑year claims .
Sequential slowdown: Total picked up revenue and tonnage declined sequentially vs Q2 2022, indicating moderation in demand; total picked up revenue was $1,339.5 million in Q3 vs $1,401.1 million in Q2, and total tonnage per workday fell from 41.87 to 38.97 .

Financial Results

Income Statement and Key Metrics

Metric	Q3 2021	Q1 2022	Q2 2022	Q3 2022
Operating Revenue ($USD Millions)	$1,301.4	$1,260.4	$1,423.7	$1,360.4
Operating Income ($USD Millions)	$48.4	$9.2	$99.2	$49.1
Operating Ratio (%)	96.3%	99.3%	93.0%	96.4%
Net Income ($USD Millions)	$8.3	$(27.5)	$60.0	$4.8
Diluted EPS ($USD)	$0.16	$(0.54)	$1.15	$0.09
Adjusted EBITDA ($USD Millions)	$94.4	$52.0	$145.9	$90.6

Pricing and Volume KPIs (LTL)

KPI	Q3 2021	Q1 2022	Q2 2022	Q3 2022
LTL Tonnage per Workday (000s)	36.58	31.18	32.80	30.64
LTL Shipments per Workday (000s)	65.22	56.08	58.56	55.58
LTL Revenue per Hundredweight incl. FSC ($)	25.12	28.72	30.69	31.30
LTL Revenue per Hundredweight excl. FSC ($)	21.84	23.83	23.88	24.65
LTL Revenue per Shipment incl. FSC ($)	282	319	344	345
LTL Weight per Shipment (lbs)	1,122	1,112	1,120	1,102

Total Picked Up Revenue and Tonnage

KPI	Q3 2021	Q1 2022	Q2 2022	Q3 2022
Total Picked Up Revenue ($USD Millions)	$1,283.2	$1,252.4	$1,401.1	$1,339.5
Total Tonnage per Workday (000s)	47.96	40.05	41.87	38.97
Total Shipments per Workday (000s)	67.05	57.53	60.16	57.03
Total Revenue per Hundredweight incl. FSC ($)	21.07	24.62	26.35	26.85

Balance Sheet and Liquidity Highlights

Metric	Q1 2022	Q2 2022	Q3 2022
Cash and Cash Equivalents ($USD Millions)	$233.8	$266.8	$284.5
Managed Accessibility under ABL ($USD Millions)	$43.1	$38.1	$41.3
Total Cash + Managed Accessibility ($USD Millions)	$276.9	$304.9	$325.8
Outstanding Debt (Par) ($USD Millions)	$1,606.9	$1,603.1	$1,602.7

Estimates vs Actuals

Metric	Q3 2022 Actual	Q3 2022 S&P Global Consensus	Surprise
Revenue ($USD Millions)	$1,360.4	Unavailable	N/A
Diluted EPS ($USD)	$0.09	Unavailable	N/A

Wall Street consensus via S&P Global was unavailable for YELLQ due to missing mapping in CIQ. As a result, estimate comparisons could not be performed.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures ($USD Millions)	FY 2022	$250–$300 (as of Q2 2022)	$210–$230 (as of Q3 2022)	Lowered
Capital Expenditures ($USD Millions)	FY 2022	$325–$400 (as of Q1 2022)	$250–$300 (as of Q2 2022)	Lowered
ABL Facility	Liquidity/Terms	Maturity Jan 2024; $450M; prior fixed rate	Maturity Jan 2026; $500M; fixed portion reduced by 50 bps	Extended/Improved

No revenue, margin, OpEx, OI&E, or tax rate guidance was provided in the press releases. Capex guidance was adjusted twice in 2022 as OEM production constraints persisted .

Earnings Call Themes & Trends

Note: A full Q3 2022 earnings call transcript was not available in the document system. Presentation slides (Ex. 99.2) were available, and prepared remarks in the press release were used to identify themes .

Topic	Previous Mentions (Q1 2022)	Previous Mentions (Q2 2022)	Current Period (Q3 2022)	Trend
Network Optimization	Plan to integrate four operating companies into one LTL network; phase one planning complete; targeted year‑end completion	Execute phase one in western U.S. during summer; full transformation around year‑end	Phase one implemented in September across 89 terminals; early results meeting expectations; rest of network integration around year‑end	Execution progressing
Pricing/Yield	Strong demand; LTL revenue per cwt +30.5% YoY (incl. FSC)	Favorable pricing; LTL revenue per cwt +29.7% YoY (incl. FSC)	LTL revenue per cwt +24.6% YoY (incl. FSC); pricing environment remains favorable	Favorable, moderating
Purchased Transportation	Managing usage; continued focus	Down to 14.5% of revenue vs 16% YoY	Lowest as % of revenue in >2 years	Improving
Volume/Tonnage	YoY declines tied to operational decisions and demand mix	LTL tonnage/workday −16.4% YoY	LTL tonnage/workday −16.2% YoY; shipments/workday −14.8% YoY	Pressure persists
Capex & Fleet	2022 capex $325–$400M; OEM constraints	Capex lowered to $250–$300M	Capex lowered further to $210–$230M; $68.1M invested in Q3	Lower
Liquidity/Capital Structure	Ongoing focus; large maturities in 2024 (slides)	Capital structure overview; leverage ratio improving (slides)	ABL maturity extended to Jan 2026; increased to $500M; 50 bps fixed rate reduction	Improved flexibility

Management Commentary

“For the sixth consecutive quarter, revenue and operating income improved on a year-over-year basis… We continue to closely manage purchase transportation expense… While demand for capacity is moderating… the LTL pricing environment remains favorable” — Darren Hawkins, CEO .
“In September, we successfully implemented phase one of the network optimization in the western United States… integrating 89 legacy YRC Freight and Reddaway terminals… We remain focused on applying lessons learned from phase one and integrating the rest of the network around the end of the year” .
“In October, we enhanced the Company’s liquidity by extending the maturity of the ABL facility… increased the size… and reduced the fixed portion of the interest rate by 50 basis points… an important first step on the path to refinancing our capital structure” .

Q&A Highlights

A full Q3 2022 earnings call transcript could not be located in the document system; only slides were available . Consequently, Q&A specifics and any clarifications are unavailable.

Estimates Context

S&P Global consensus estimates for YELLQ were unavailable due to missing CIQ mapping, preventing comparison of reported revenue and EPS to Wall Street consensus. As such, we cannot assess beats/misses versus consensus for Q3 2022 using S&P Global data.

Key Takeaways for Investors

Pricing strength offset significant volume declines; yield improvements (revenue per cwt and per shipment) and disciplined purchased transportation usage underpinned profitability despite a tougher demand backdrop .
Network optimization is transitioning from planning to execution, with Phase One completed and full integration targeted by year‑end, which should unlock asset utilization and cost efficiency opportunities in 2023 .
Liquidity improved with the ABL extension to 2026 and upsizing to $500M; capital structure refinancing path is a management focus and could be a stock catalyst as maturities approach .
Capex was cut again to $210–$230M for FY 2022, reflecting OEM constraints; lower investment may temper near‑term fleet refresh but supports cash preservation .
Sequential moderation versus Q2 highlights demand normalization; operating ratio deterioration (to 96.4%) vs Q2’s 93.0% warrants monitoring if volume headwinds persist .
Claims expense volatility impacted results; resolution of significant prior‑year claims drove a $19.4M increase in third‑party liability claims, pointing to risk in non‑operating cost lines .
With consensus estimates unavailable, traders should watch near‑term updates on tonnage trends and network integration progress as primary narrative drivers alongside capital structure developments .

Yellow Corp (YELLQ)·Q3 2022 Earnings Summary