Less-than-truckload carrier Saia reported a significant step up in financial results during the second quarter, following a first-quarter miss that led to a 30% drop in shares on the day of the report. Tariff noise tanked demand in the first quarter, exacerbating incremental costs incurred by the company to open and operate new terminals.
Saia (NASDAQ: SAIA) reported second-quarter earnings per share of $2.67 ahead of the market open on Friday. The result was 28 cents ahead of consensus and 81 cents better than the first quarter. (The EPS result was $1.16 lower year over year.)
A combination of higher interest expense (net debt used to fund terminal acquisitions increased $125 million y/y) and a higher tax rate were a 10-cent drag on the quarter.
The better-than-expected result pushed Saia’s shares 12.9% higher in pre-market trading on Friday.
Table: Saia’s key performance indicators
The Johns Creek, Georgia-based carrier reported a slight y/y dip in revenue to $817 million, but the result was $9 million ahead of analysts’ expectations.
Tonnage increased 1.1% y/y but revenue per hundredweight, or yield, was down 2.1% y/y (1.2% lower excluding fuel surcharges). The tonnage increase resulted from a 2.8% decline in shipments, which was offset by a 4% increase in weight per shipment.
Higher shipment weights were a drag on the yield metric in the period and were only partially offset by a 0.6% increase in length of haul.
“I was pleased with our team’s ability to focus on what was within our control in the second quarter,” said Saia President and CEO Fritz Holzgrefe in a news release. “Our continued emphasis on taking care of the customer in all of our markets, mix management, and managing costs to adjust to current volume trends demonstrated our ability to navigate a dynamic backdrop.”
Saia reported an 87.8% operating ratio (inverse of operating margin), which was 450 basis points worse y/y, but 330 bps better than the first quarter. The result was also 120 bps better than management’s guidance.
Cost per shipment was up 7.7% but revenue per shipment increased just 1.8%.
Saia will host a conference call at 10 a.m. EDT on Friday to discuss second-quarter results.
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