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Saia’s stock pops 15% on lone LTL earnings beat

April revenue down 1% but much better than peers

Saia has opened 21 new terminals in the last two years. (Photo: Jim Allen/FreightWaves)

Better-than-expected quarterly results sent shares of less-than-truckload carrier Saia higher on Friday. The company’s efforts to add heavier-weight shipments is helping to offset soft freight demand.

Saia (NASDAQ: SAIA) reported first-quarter earnings per share of $2.85, 17 cents better than the consensus estimate but 13 cents lower year over year (y/y). A higher tax rate was a 3 cent headwind compared to the year-ago period.

Shares of SAIA were up 14.6% on Friday compared to the S&P 500, which was up just 0.8%. The report was welcomed by LTL investors after competitor Old Dominion Freight Line (NASDAQ: ODFL) reported a more pronounced falloff in its business on Wednesday, sending shares of all LTL carriers lower.

Saia’s revenue was flat y/y at $661 million as a 7% decline in shipments was mostly offset by a 6% increase in revenue per shipment (excluding fuel surcharges), management’s preferred pricing metric.


Tonnage was down 6% y/y in the quarter, with January off 3.7%, February down 7.6% and March down 5.2%. February was up against a tough comparison (up 19% y/y). Going forward, the monthly comps ease through the summer, turning negative in the back half of the year.

Revenue per hundredweight, or yield, was up 5% excluding fuel. However, a 2% increase in weight per shipment and a 2.5% decline in length of haul weighed on the metric. Management has been less focused on the traditional yield metric as initiatives to raise shipment weights are counterproductive to the calculation.

Contract renewals in the quarter came in 7.5% higher y/y on average.

“I think the market is pretty disciplined,” President and CEO Fritz Holzgrefe told analysts on a Friday call. “The inflationary cost that everybody’s dealing with points to the need to continue to drive pricing. Cheaper freight in this kind of environment doesn’t make much sense.”


The commentary marked a different approach than the one taken by competitor ArcBest (NASDAQ: ARCB) in the quarter. ArcBest leaned on a dynamic pricing strategy, taking on lower-margin freight to keep its network full.

Table: Saia’s key performance indicators

Saia’s revenue in April is down approximately 1% y/y. Shipments are up sequentially from March but management said that month was weaker than normal. On a y/y comparison, shipments are down 5% y/y in April but higher weight per shipment has tonnage down less than 1% y/y.

By comparison, ArcBest’s asset-based revenue is down 11% y/y in April. Old Dominion’s is down 15%.

Softness in transactional 3PL shipments, an area Old Dominion called out as having a negative impact on the quarter, was less of an impact for Saia as it only accounts for 4% to 5% of the carrier’s total revenue.

Old Dominion’s tonnage is down 15% y/y in April.

Saia recorded an 85% operating ratio, 60 basis points worse y/y. Most expenses increased as a percentage of sales.

Salaries, wages and benefits were 150 bps higher y/y as head count increased 1.5% and the company implemented a 4.3% wage increase in July. Saia has added 200 employees over the last year but it has also added 15 terminals over the same time, implying there has been some attrition at its established terminals. Management also said it has been closely managing employee hours.

Fuel expense was up 290 bps as diesel prices were 4% higher y/y for the carrier.


However, purchased transportation expense declined 480 bps as third-party truck and rail accounted for 10.5% of linehaul miles in the quarter compared to 19% a year ago. Management said it will continue to use more company assets to accomplish linehaul moves.  

Saia has opened 21 terminals in the last two years. Those aren’t yet seeing normal revenue run rates and the startup costs associated with those sites were a drag on OR.

The company normally sees 200 to 300 bps of OR improvement from the first to second quarters. It expects to see just 100 bps of improvement this year as revenue is expected to see just a slight sequential increase and newer terminals are operating at a mid-90s OR.

More FreightWaves articles by Todd Maiden

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2 Comments

  1. I seen

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.