Less-than-truckload carrier Saia’s shares were off 12% in midday trading on Thursday following a better-than-expected second-quarter report that was muted by management’s softer third-quarter margin outlook. The company has made real estate investments totaling over $1 billion in recent years, and its new locations are still working to close the profitability gap to the rest of the network.
Saia (NASDAQ: SAIA) reeled in its full-year margin outlook on a Thursday call with analysts. It now expects to hit the lower end of a guidance range calling for 100 to 200 basis points of year-over-year improvement.
“Our strong second quarter results highlight the continued enhancement of our expanded service offering, disciplined execution and the commitment of our team members,” said Saia CEO Fritz Holzgrefe. “We achieved record revenue and tonnage, along with a second-quarter record in shipments, reflecting solid growth across our network.”
The Johns Creek, Georgia-based company reported second-quarter earnings per share of $3.51 on Thursday before the market opened. The result was 84 cents higher y/y and 12 cents better than the consensus estimate. A lower tax rate compared to the prior-year quarter was a 2-cent tailwind. A $3 million decline in net interest expense was an 8-cent tailwind.
Revenue was 17% higher y/y at 957 million, largely in line with consensus. Both tonnage and yield increased by 8% y/y. (Yield was down 2% excluding fuel surcharges.)
The tonnage increase was driven by a 4% increase in both shipment counts and shipment weights. Tonnage was up 6.9% y/y in April, up 8.4% in May and 9.9% higher in June. July tonnage was 7.5% higher y/y.
Saia implemented a 7.1% general rate increase on July 6. The increase was 120 bps higher and 3 months earlier than last year’s rate bump. Management said that GRI implementations create some near-term volatility in shipment counts as shippers assess their options. Looking at tonnage on a two-year-stacked comparison to mute the impact of prior-year results, Saia’s tonnage has remained in a range of plus-8% to plus-9% over the past three months.
(Saia’s prior-year comps range from mostly negative to slightly positive for the rest of the year.)
Management also explained the 2% y/y yield decline, which was a bit of an outlier compared to peers. Higher shipment weights and a lower length of haul (down 1% y/y) were headwinds to revenue per hundredweight. It said excluding those impacts, and the Los Angeles market where shipment counts have been soft (still down 2.5%), net yield was likely up 3% y/y.
Contractual renewals averaged 10.7% in the second quarter (up 15.8% on a two-year-stacked comp). The result was well ahead of peers, but management concedes its offering is priced below the market relative to the service levels it provides.
Saia reported an 86.9% operating ratio (inverse of operating margin) in the quarter, 90 bps better y/y. This was the first y/y OR improvement since the 2024 first quarter and ahead of management’s implied guidance for an 87.5% OR.
The carrier usually sees margins decelerate by 150 to 200 bps from the second to third quarter, but it expects just 100 bps of sequential degradation this year. The guide implies an 87.9% OR in the third quarter, which would be 30 bps worse y/y (excluding the OR impact from a gain on the sale of real estate in the 2025 third quarter). Management pointed to a pull forward in the timing of wage increases as the reason for the perceived weaker-than-expected guide.
Also, the addition of new service centers has been a drag on margins. Since 2022, Saia has added 33 new locations and expanded or relocated another 25 terminals. The actions have made it a true national carrier, increasing its door count by 25%. Margins at these locations improved approximately 300 bps during the second quarter, but at a low-90% OR, the facilities still trail the company’s legacy network.
A full-year net capex range of $350 million to $400 million was reiterated. Net capex was $544 million in 2025 and $1.05 billion in 2024.
Shares of SAIA were down 11.7% at 12:15 p.m. EDT on Thursday compared to the S&P 500, which was up 1.3%.
Why it matters? Saia is one of a few publicly traded LTL carriers. Its quarterly results provide insight into a subsegment of trucking where few public datasets exist.
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