You fools are taking the bait. The oldest trick in the book is to write off every damn thing you can pre merger. USF was encouraged by YELL to expense EVERYTHING POSSIBLE. Take reserves up the ass - even the Executive Toilet Paper out the next 5 decades. It's done to flush the financials, establish big reserves, a layup for post merger reversals against reserves, upside earnings after the merger.
They did it with ROAD. And they're doing it with USF. Take the bait and go short you fools. You'll get your ass kicked when YELL reports upside, then raises guidance.
For those who have never been there they do not know what you are talking about. Yellow does not want to bring old problems that will expensed later. I don't think the reserves will be overstated cause there is no cash to receive from a reserve, but AR is written off early. Marginal assets that do have value are written off, but later bring in some cash. This creates an expense for Q1 instead of post acquistion.
They noted last night same thing happened with Roadway. How low we go is another story. Reward will not be immediate. It will have to be proved, but they already proved they new how to handle a merger and now they are doing what is necessary to keep from bringing forward problems/expenses. What happens is every asset gets revalued based on the purchase price and you only want to do that with assets that truly have value. This creates a window to write off marginal assets, but has nothing to with revenues.
My concern is 20% of USF revenues comes from autos. Sorry, but I will not touch autos. That made USF shortfall bigger than YELL was expecting. No amount of mgmt expertise can make up for something that is not cotrollable. Anyone got a positive spin on the revenue side of USF?