The less-than-truckload sector began the earnings season on a sour note after Saia Inc. and Old Dominion Freight Line Inc. and posted year-over-year declines in profits and failed to meet the forecasts from industry analysts.
Fourth-quarter net income at Saia dropped 9.1% to $10.3 million, or 40 cents per share, falling short of the average forecast of $11.5 million, or 42 cents, according to a Bloomberg News survey. In the year prior, the company earned $11.4 million or 45 cents.
A day earlier, Old Dominion Freight Line reported income of $68.5 million, or 83 cents, down 5.1% year-over-year and 2 cents less than the forecasts.
Similar to Old Dominion, Saia’s revenue increased 4.4% to $300.2 million, but that couldn’t make up for about $7 million more in wages and employee benefits, $4 million in claims and insurance expenses and a $3 million jump in depreciation and amortization.
“[The] depreciation and amortization expense was up 17.2% in the fourth quarter, a reflection of the significant investments we are making in our fleet, real estate and information technology," Saia CEO Rick O’Dell said. "The benefits of a newer fleet accrue to us in the form of lower maintenance costs, better reliability, advanced safety technology in our tractors and better fuel mileage."
On the insurance and claims line, he told investors that the increase wasn’t related to accidents, but rather, “It reflects the general inflationary trends in the costs of settlement and litigation in the trucking industry,” O'Dell said.
The Johns Creek, Georgia-based carrier hauled 842,000 tons consisting of 1.5 million less-than-truckload shipments in the quarter, with both segments virtually unchanged from the year prior. The smaller truckload division hauled 172,000 tons consisting of 24,000 shipments, up 4.3% and 2.3%, respectively.
Revenue per 100 pounds of freight went up 5.1%, and revenue per shipment increased 4.4% year-over-year in the LTL division. For truckload, the numbers dropped 3.9% and 2.0% respectively. The average length of a haul increased 2.2% to 792 miles combined across both services.
Saia earned $48 million in profits for all of last year, or $1.87, but it was less than the $49.2 million, or $1.90, from the Bloomberg News survey of analysts.
Old Dominion ranks No. 11 on the Transport Topics Top 100 list of the largest for-hire companies in the United States and Canada. Saia ranks No. 25.