(Adds comments from conference call throughout and updated stock prices.)

By Jon Kamp

Of DOW JONES NEWSWIRES

YRC Worldwide Inc. (NASDAQ-NMS:YRCW) (YRCW) said Wednesday it expects to incur fourth-quarter impairment charges totaling $650 million to $750 million after tax, mainly related to a decline in value of its 2005 acquisition of USF Corp., and triggered in part by a steep stock price decline.

The Overland Park, Kan., transportation service provider said the charge is primarily from an impairment review of goodwill and other intangible assets related to the $1.37 billion purchase of regional trucker USF. The remainder is due to the anticipated reduction in the fair value of the trade names USF and Roadway, which YRC bought in 2003.

The company said in a statement it doesn't expect the impairment charges to have any impact on its cash flow or the availability of financing under existing debt facilities.

YRC Chairman and Chief Executive Bill Zollars said during a Wednesday conference call the company's "falling stock price" played a big role in the valuation determination that triggered the charges. YRC, which is the largest U.S. less-than-truckload trucking company, has been pinched by high fuel costs and soft economic conditions, including weakness in the manufacturing, housing and retail sectors.

Less-than-truckload carriers consolidate freight for more than one customer in a single truck.

YRC stopped giving guidance around the middle of last year due to difficulty in forecasting market conditions and when things might improve. Zollars warned during Wednesday's call, however, that fourth-quarter results will be "below our standards and well below past performance".

"We continue to experience volume significantly below last year and a related very competitive pricing environment," Zollars said. He added that "things have not improved from an overall economic environment standpoint."

Shares of YRC recently fell 94 cents, or 5.5%, to $16.15. Shares are off about 66% from the 52-week high of $47.09 reached Feb. 22, and have neared the six- year low reached Nov. 21.

YRC is not alone in feeling rough conditions in the trucking market, and shares were down across the sector Wednesday following the company's fourth- quarter comments. Shares of FedEx Corp. (NYSE:FDX) (FDX) were recently down 3.5% to $86.07 while shares of United Parcel Service Inc. (NYSE:UPS) (UPS) were off 1.3% to $69.80.

Con-Way Inc. (NYSE:CNW) (CNW) shares were recently down 0.7% to $41.25, while shares of Arkansas Best Corp. (NASDAQ-NMS:ABFS) (ABFS) were down 3.5% to $21.17.

Despite the fourth-quarter charges, Zollars said that YRC's "financial position remains solid."

He also said that the charge doesn't reflect management's long-term view, and that he's looking forward to a very successful 2008. The company believes that previously announced cost-cutting in its YRC Regional Transportation unit, which includes former USF companies, will add roughly $100 million to the balance sheet. "Cost-reduction actions and operational improvements across the company set the stage for improved performance in 2008," said Zollars in the release.

Analysts surveyed by Thomson Financial are expecting, on average, that YRC will post earnings of 57 cents a share in the fourth quarter, down from 80 cents in the fourth quarter of 2006.

-By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com

(John Flowers contributed to this report.)

    (END) Dow Jones Newswires   01-02-08 1125   Copyright (c) 2008 Dow Jones & Company, Inc.