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Old Dominion (ODFL) Offers $1.5B for Yellow's Terminals
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Old Dominion Freight Line (ODFL - Free Report) has reportedly offered $1.5 billion to acquire Yellow Corporation’s portfolio of terminals out of bankruptcy. We remind investors that trucking firm Yellow Corporation had filed for bankruptcy earlier this month.
The trucking company’s bankruptcy filing in a Delaware court estimated assets and liabilities in the range of $1-$10 billion, with more than 100,000 creditors. Per CEO Darren Hawkins, “It is with profound disappointment that Yellow announces that it is closing.”
Old Dominion’s bid exceeds that of Estes Express Lines, a privately owned freight transportation provider. Estes Express Lineshad offered $1.3 billion for Yellow’s North American real-estate holdings. ODFL’s offer comes after the bankrupt trucking company had accepted a $142.5 million loan from Citadel and MFN Partners to fund its liquidation. Along with allowing Yellow more time to sell off its assets, this loan facilitates $27-$40 million savings in fees.
Yellow Corporation’s collapse and the subsequent competing offers come at a time when the freight scenario is already weak. Due to the weakness pertaining to freight demand, Cass Freight Index declined 2.2% on a month-on-month basis in July. In fact, this index has dropped month on month in five out of the first seven months of the year.
Zacks Rank & Key Picks
Old Dominion currently carries a Zacks Rank #3 (Hold).
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our projection for third-quarter total revenues hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 19.7% upward over the past 60 days.
The uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. It is the primary driver behind the uptick in demand for midsize air freighters.
With shippers replacing their older, less fuel-efficient equipment, ATSG’s freighters have emerged as suitable replacements. Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide. The Zacks Consensus Estimate for ATSG’s current-year earnings has been revised 11.2% upward in the past 60 days.
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Old Dominion (ODFL) Offers $1.5B for Yellow's Terminals
Old Dominion Freight Line (ODFL - Free Report) has reportedly offered $1.5 billion to acquire Yellow Corporation’s portfolio of terminals out of bankruptcy. We remind investors that trucking firm Yellow Corporation had filed for bankruptcy earlier this month.
The trucking company’s bankruptcy filing in a Delaware court estimated assets and liabilities in the range of $1-$10 billion, with more than 100,000 creditors. Per CEO Darren Hawkins, “It is with profound disappointment that Yellow announces that it is closing.”
Old Dominion’s bid exceeds that of Estes Express Lines, a privately owned freight transportation provider. Estes Express Lineshad offered $1.3 billion for Yellow’s North American real-estate holdings. ODFL’s offer comes after the bankrupt trucking company had accepted a $142.5 million loan from Citadel and MFN Partners to fund its liquidation. Along with allowing Yellow more time to sell off its assets, this loan facilitates $27-$40 million savings in fees.
Yellow Corporation’s collapse and the subsequent competing offers come at a time when the freight scenario is already weak. Due to the weakness pertaining to freight demand, Cass Freight Index declined 2.2% on a month-on-month basis in July. In fact, this index has dropped month on month in five out of the first seven months of the year.
Zacks Rank & Key Picks
Old Dominion currently carries a Zacks Rank #3 (Hold).
Investors interested in the Zacks Transportation sector may consider stocks like United Airlines (UAL - Free Report) and Air Transport Services (ATSG - Free Report) . All stocks currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Airlines is seeing steady recovery in domestic and international air-travel demand. Owing to this, UAL expects revenues for the September quarter to grow 10-13% year over year. Our projection for third-quarter total revenues hints at an increase of 11.4% year over year.
For third-quarter 2023, United Airlines anticipates capacity to improve 16% from the year-ago reported figure. The Zacks Consensus Estimate for UAL’s current-year earnings has been revised 19.7% upward over the past 60 days.
The uptrend with respect to e-commerce even in the post-pandemic scenario is a huge positive for Air Transport Services. It is the primary driver behind the uptick in demand for midsize air freighters.
With shippers replacing their older, less fuel-efficient equipment, ATSG’s freighters have emerged as suitable replacements. Driven by the upbeat demand, ATSG has delivered a record six converted freighters under lease in a month to its customers worldwide. The Zacks Consensus Estimate for ATSG’s current-year earnings has been revised 11.2% upward in the past 60 days.