YRC insists credit solid after stock plunges 30 pct

(Adds details of sector, YRC CEO, analyst comments; byline)

By Nick Carey

CHICAGO, Oct 7 (Reuters) - North America's largest trucking company YRC Worldwide Inc (YRCW.O) insisted on Tuesday that it has a solid financial position and can pay down its debts after its share price plunged 30 percent on the Nasdaq.

"With more than $9 billion in annual revenue and comprehensive networks in the national and regional markets, we continue to provide excellent service to our customers each and every day," Chief Executive Bill Zollars said in a statement.

"Despite the continuing unrest in the broad financial markets, our current financial position is solid and we remain well positioned to weather this economic environment."

Some analysts have raised questions about the less-than-truckload (LTL) company's ability to meet its debt covenants in a deteriorating economic environment. LTL operators consolidate smaller loads into a single truck.

R.W. Baird & Co analyst Jon Langenfeld wrote in a note for clients "Investor concerns (are) rising over YRCW's financial situation given the rapid deterioration in third-quarter industry trends coupled with YRCW's debt position and internal restructuring; bankruptcy concerns are mounting."

Like the rest of the U.S. trucking sector, YRC's business has been hit by a combination of a crumbling housing sector, weak retail and auto sales, and an overall weakening of the housing sector.

With demand on the wane, many trucking companies have been forced to compete by lowering their prices to get business.

LTL operator Con-way Inc (CNW.N) slashed its full-year earnings outlook last week, citing a "battered" economy and a fiercely competitive pricing environment.

But YRC has also had problems of its own. After struggling for several quarters, the LTL giant instituted a restructuring program at the beginning of this year that cut 1,100 jobs and shut a number of service centers at two poorly performing regional units.

YRC also took a $782 million goodwill write-down in the fourth quarter of 2007 due to the problems at those units.

YRC said on Oct 3, it was redeeming some outstanding notes early and insisted then that its financial position was solid.

In a research note the previous day Raymond James analyst William Fisher referred to "YRCW's increasingly precarious financial situation in a nervous credit market."

The company's stock has fallen more than 50 percent since Oct 3 and around 90 percent since February 2007 when it was trading at close to $50.

YRC CEO Zollars told Reuters that reports questioning the company's financial situation were erroneous and fueled by the panic that has gripped Wall Street in recent weeks.