TFI International (TSX:TFI) reported a flat third quarter as a tenacious performance from its core North American truckload businesses propped up its uneven transportation and logistics portfolio.
TFI earned an adjusted C$1.04 per share or C$88.1 million in net income on C$1.3 billion of revenue. (A Canadian dollar equates to US$0.76.) The results slightly underperformed analysts’ expectations of C$1.05 per share on C$1.32 billion in revenue – something uncharacteristic of Canada’s largest transportation and logistics company in recent quarters.
Revenue increased by 1% compared to the third quarter of 2018, while adjusted income declined by nearly 7%. Nevertheless, TFI continued to demonstrate its resilience in a challenging 2019 North American freight market, CEO Alain Bédard said in a statement on October 24.
“While we closely monitor economic conditions and their impact on the North American freight business, our own attention to the fundamentals of the business has allowed us to outperform,” Bédard said.
TFI’s truckload business, its largest segment, saw a 19% increase in operating income, hitting C$75.8 million. Truckload revenue increased by a smaller 7% to C$557.2 million.
While its specialized truckload segment reported higher revenues, its Canadian and U.S. conventional truckload units tried to make the most of softer revenue.
TFI’s Canadian truckload business pushed its operating ratio down to 83%, a remarkable figure for Canada. Meanwhile, the U.S. units produced a 90.9% operating ratio, versus 92.4% a year ago.
Less-than-truckload revenues dropped by 10% to C$205.4 million, but operating profit increased slightly to C$28.5 million.
Logistics and last-mile revenues grew by 8% to C$256.8 million, but operating income plunged by C$18 million.
TFI had an overall operating ratio of 89.6% – performance slightly worse than 88.9% compared to a year ago.
TFI holds a call with analysts on October 25.