Executive Summary

Q4 2022 revenue declined sequentially and year over year as LTL volumes fell sharply, but yield remained strong; revenue was $1.20B, operating income $40.3M (incl. $28.2M property gains), and GAAP EPS was -$0.30. Adjusted EBITDA was $54.6M, down from $90.6M in Q3 and $115.5M in Q4’21 .
Management cited a broad macro slowdown (manufacturing and retail) driving a 25% YoY decline in LTL tonnage/workday, while price/mix (revenue per cwt) stayed robust (+21.1% YoY incl. fuel), supporting yield despite volume pressure .
Balance sheet actions were a focus: Yellow sold one terminal in Q4 (~$31M), paid down term debt, and in early January repaid the $66M CDA notes, reducing total debt by nearly $100M from Q4 through early January—helpful toward refinancing goals .
S&P Global (Capital IQ) consensus estimates were not available for YELLQ at the time of this analysis; estimate comparisons are therefore unavailable. Values would normally be retrieved from S&P Global [GetEstimates error].

What Went Well and What Went Wrong

What Went Well
- Yield/pricing held firm in a softer freight market: LTL revenue per hundredweight increased 21.1% YoY including fuel (+12.4% ex-fuel) in Q4, and per-shipment revenue rose 17.8% (+9.3% ex-fuel) .
- Network optimization progressed: Phase 1 (West) operating as a super-regional network; Phase 2 (Midwest/Northeast/Southeast) planning continued, expected to improve utilization, efficiency, and capacity without new terminals .
- Debt reduction momentum: ~$31M terminal sale in Q4 used to pay down term loan; $66M CDA notes repaid in early January, cutting debt by nearly $100M to support refinancing efforts .
What Went Wrong
- Volume deterioration: LTL tonnage/workday fell 25.1% YoY; shipments/workday fell 23.0% YoY as macro demand weakened (manufacturing and retail), pressuring operating leverage .
- Margin pressure: Operating ratio worsened to 96.6% (vs. 96.4% in Q3 and 95.7% in Q4’21), reflecting reduced tonnage and deleverage despite strong yields .
- Profitability compression: Adjusted EBITDA dropped to $54.6M (from $90.6M in Q3 and $115.5M in Q4’21), and GAAP EPS was -$0.30; Q4’21 EPS was -$0.88 but included a non-cash pension settlement loss; ex that item, Q4’21 EPS would have been $0.20 .

Financial Results

Income statement snapshot and profitability metrics

Metric	Q4 2021	Q2 2022	Q3 2022	Q4 2022
Revenue ($USD Billions)	$1.309	$1.424	$1.360	$1.200
Operating Income ($USD Millions)	$55.8	$99.2	$49.1	$40.3
Operating Ratio (%)	95.7%	93.0%	96.4%	96.6%
Net Income (Loss) ($USD Millions)	$(44.7)	$60.0	$4.8	$(15.5)
Diluted EPS ($)	$(0.88)	$1.15–$1.17 (basic 1.17; diluted 1.15)	$0.09	$(0.30)
Adjusted EBITDA ($USD Millions)	$115.5	$145.9	$90.6	$54.6

Notes: Q4’22 operating income includes $28.2M net gains on property disposals . Q4’21 EPS was impacted by a $54.9M non-cash pension settlement loss; excluding this, Q4’21 net income was $10.2M and EPS $0.20 .

LTL operating KPIs

KPI	Q4 2021	Q2 2022	Q3 2022	Q4 2022
LTL Tonnage/Workday (000s)	36.20	32.80	30.64	27.12
LTL Shipments/Workday (000s)	63.66	58.56	55.58	49.05
LTL Revenue/CWT incl. FSC ($)	26.47	30.69	31.30	32.05
LTL Revenue/Shipment incl. FSC ($)	301	344	345	354
LTL Weight/Shipment (lbs)	1,137	1,120	1,102	1,106

Vs. Estimates (S&P Global/Capital IQ)
- Revenue, EPS, EBITDA: Not available. S&P Global consensus mapping for YELLQ was unavailable at time of query; therefore, estimate comparisons cannot be provided. Values would normally be retrieved from S&P Global.

Guidance Changes

No formal 2023 quantitative guidance was issued in the Q4 materials. Management reiterated network optimization plans and balance sheet priorities. A prior capex guidance change in 2022 is noted below for completeness .

Metric	Period	Previous Guidance	Current/Update	Change
Capital Expenditures	FY 2022	$325–$400M (earlier) → lowered to $250–$300M (Q2)	Lowered again in Q3 to $210–$230M (Q3 update) ; Actual $191.8M	Lowered
ABL Facility	Liquidity/tenor	Prior maturity Jan-2024	Extended to Jan-2026 with improved terms (Oct-2022)	Improved terms/extended maturity

Additional balance sheet actions (not guidance): ~$31M terminal sale in Q4 used to pay down term loan; $66M CDA notes repaid on Jan 3, 2023 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
Network optimization (One Yellow)	Q2: Planned integration; strong yield and cost control . Q3: Phase 1 implemented in West; early results meeting expectations .	Phase 1 operating as super-regional; planning Phase 2 (Midwest/Northeast/Southeast); plan to sell ~17 overlapping terminals; expect efficiency, utilization, and cost benefits .	Progressing; execution moving from Phase 1 to Phase 2.
Macro demand (manufacturing/retail)	Q2: Elevated demand, favorable pricing . Q3: Demand moderating; pricing favorable .	Demand softened; manufacturing sector wavered; tonnage/workday -25.1% YoY .	Deteriorating volumes; pricing still firm.
Pricing/yield	Q2: LTL rev/cwt +29.7% YoY incl. fuel . Q3: +24.6% YoY incl. fuel .	+21.1% YoY incl. fuel; +12.4% ex fuel; January contracts up ~5–6% (call) .	Yield robust despite volume declines.
Liquidity/capital structure	Q2: Lower capex guidance; focus on purchased transportation, yields . Q3: ABL extended to 2026; liquidity $325.8M .	~$31M asset sale; ~$100M debt reduced from Q4 through early Jan; CDA notes repaid .	Balance sheet simplification ongoing; refinancing focus.
Technology/customer experience	Not highlighted.	2023 priority to enhance customer experience with tech investments and self-service features (call) .	Increasing emphasis on digital capabilities.

Management Commentary

“In the fourth quarter demand for LTL capacity decreased compared to the tight environment a year ago contributing to the decline in tonnage per workday… Despite the near-term headwinds, the yield environment remains stable.” — CEO Darren Hawkins .
“Phase one of our network optimization… is operating as a super-regional carrier… approximately 90% of our network will be operating as a super-regional carrier [after Phase 2]… expected to improve asset utilization, enhance network efficiencies, lead to cost savings and create capacity without the need to add terminals.” — CEO .
“As we optimize the network, we plan to sell approximately 17 excess terminals… In the fourth quarter we sold one of the excess terminals for approximately $31 million… In early January, we also paid the outstanding $66 million balance of the CDA notes… Reducing our outstanding debt by nearly $100 million is another important step on the path to refinancing.” — CEO .
“Our current run rate right now is between $180 million and $190 million per year of interest expense. Our cash interest for Q4 was $24.6 million and $127 million for full year 2022.” — CFO Dan Olivier (Q&A) .
“Looking ahead, our priorities in 2023 include continuing to enhance our customer experience with technology investments… and provide a streamlined suite of service offerings utilizing the speed of our super regional network.” — CEO (prepared remarks) .

Q&A Highlights

Demand cadence/seasonality: January was cited as better than feared by parts of the market; management discussed contract renewals averaging ~5–6% in January, indicating yield resilience even as volumes soften .
One Yellow benefits: Management expects to quantify cumulative cost and service benefits as Phase 2 executes; they already see reduced P&D miles, dock cost benefits, and improved on-time service in the West (Phase 1) .
Interest expense and leverage: CFO framed annualized interest expense at $180–$190M; cash interest Q4 $24.6M; deleveraging focus via asset sales and note repayment to support refinancing .
Industry structure/collaboration: Discussion addressed potential for unionized carrier collaboration in the industry; management emphasized Yellow’s unique real estate footprint and employee base as competitive advantages (paraphrased from Q&A) .

Estimates Context

S&P Global (Capital IQ) consensus estimates for YELLQ for Q4 2022 (revenue, EPS, EBITDA) were not available due to missing mapping for YELLQ in the S&P Global dataset at query time; therefore, comparisons versus consensus are unavailable. Normally, values would be sourced from S&P Global.

Key Takeaways for Investors

Volume headwinds vs. yield tailwinds: The quarter underscores severe volume declines (tonnage/workday -25% YoY) offset by robust pricing (+21% rev/cwt incl. fuel). In a soft macro, pricing durability is a key pillar of the thesis .
Execution catalyst: One Yellow network optimization (Phase 2 ahead) is the primary operational lever to restore margins via efficiency and asset utilization; the sale of ~17 excess terminals and super-regional model are tangible actions to watch .
Balance sheet path: ~$100M debt reduction from Q4 through early January and the extended ABL facility to 2026 reduce near-term risk and are stepping stones toward broader refinancing; continued asset monetization is a likely tool .
Profitability reset: Adjusted EBITDA stepped down to $54.6M in Q4 from $90.6M in Q3; near-term recovery depends on stabilizing tonnage and realizing One Yellow savings .
Watch interest burden: With annualized interest expense running ~$180–$190M, improvements in operating cash flow and asset sales are critical to bridge until operating momentum returns .
Trading setup: Near-term catalysts include Phase 2 execution milestones, additional terminal sales/debt paydown, and any early signs of volume stabilization; risk remains if macro softness persists and delays operating ratio improvement .

Sources and supporting documents:

Q4 2022 8-K and press release, including financial statements and supplemental stats .
Q3 2022 8-K and press release for trend analysis .
Q2 2022 8-K and press release for trend analysis .
Q4 2022 earnings call transcript (external): Seeking Alpha and InsiderMonkey .
Company press release PDF (investor site) .

Yellow Corp (YELLQ)·Q4 2022 Earnings Summary