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August 8, 2016 2:15 AM, EDT

XPO, YRC Post Profits in 2nd Quarter

YRC Worldwide

This story appears in the Aug. 8 print edition of Transport Topics.

Second-quarter earnings rose at YRC Worldwide and XPO Logistics’ less-than-truckload unit, but results of other publicly traded carriers slipped along with the struggling U.S. industrial sector.

YRC raised net income 4%, and the LTL unit of XPO improved operating income, which excludes interest and tax expenses, by 66%.

Elsewhere, Old Dominion Freight Line’s earnings dipped 5%, and Saia Inc. dropped 31%. ArcBest Corp. earnings fell 49%, including 38% less LTL operating income. Roadrunner Transportation’s LTL operating income plummeted 90% to $800,000, as quarterly revenue fell 12% to $122.3 million. UPS Freight also struggled, reporting a 10% drop in tonnage and 6.9% fewer shipments. Its profits weren’t disclosed.

Companywide, XPO posted its first-ever net income to common shareholders: $42.6 million, or 35 cents per share, reversing a year-earlier loss of $75.1 million, or 89 cents. Quarterly revenue more than tripled from the same time last year to $3.7 billion.

“We are clearly at a positive inflection point,” CEO Bradley Jacobs told Transport Topics. “From a profitability standpoint, North American LTL was clearly the star.”

The operating ratio was 86.7 at the LTL unit that operated as Con-way Freight until XPO acquired Con-way Inc. last year. The mark was a 5.7 percentage-point improvement and the best performance in a decade, Jacobs said.

XPO’s transportation segment revenue reached to $2.4 billion, also helped by last-mile unit results. Transportation operating income reached $153.2 million, including $115.5 million from the LTL unit.

Logistics revenue at XPO reached $1.3 billion. Operating income in that sector was $106.9 million, about triple the prior-year period. E-commerce and high-technology business aided logistics results.

Saia and ArcBest Corp. chose the word “challenging” to describe freight conditions.

“The inconsistent economic operating environment, combined with a surplus of transportation capacity, continues to impact available business levels and operating margins,” ArcBest wrote in its statement.

YRC’s net income was $27.1 million, or 83 cents. Revenue declined $50.8 million, or 4%, to $1.21 billion. Expenses declined $51.1 million. A $10.4 million increase from a real estate gain helped results.

YRC’s national unit revenue dropped 5.1% to $775 million, but operating income rose 26% to $28.4 million. YRC Freight’s revenue per 100 pounds of freight remained relatively unchanged, including fuel surcharge. The shipment count fell 5%, and weight per shipment fell 1.5%. Regional revenue and revenue per 100 pounds of freight fell about 2%.

YRC CEO James Welch said in a statement that “year-over-year tonnage per day was down during the quarter, but in June the decline was much smaller than April and May.”

ArcBest’s revenue fell 3% to $676.6 million, producing earnings of $10.2 million, or 39 cents. Its ABF Freight LTL business revenue was off 3% at $486.7 million. That unit increased freight shipments by 0.4%, but tonnage fell 3.2%.

Operating income plunged 77% at ArcBest’s logistics unit. Asset- light logistics revenue rose to $205.2 million from $204.9 million, but profitability was hurt by brokerage transition costs and Panther’s weak truckload market.

Saia’s earnings slipped to $13.3 mil- lion, or 52 cents, from $19.2 million, or 75 cents.

CEO Richard O’Dell cited improved pricing as a positive factor that was offset by accident and health-care costs. Revenue fell 3.6% to $312 million as tonnage fell 4.3%, shipments declined 2.6% and revenue per 100 pounds of freight was 2% higher including fuel surcharge. LTL shipment weight dipped 1.7%.

Old Dominion earned $81.4 million or 98 cents. Revenue fell 1% to $755.4 million.

“Our quarterly revenue was once again negatively impacted by reductions in both fuel surcharges and non-LTL revenue,” said David Congdon, CEO of Old Dominion. “These factors, combined with a domestic economy that remained sluggish, resulted in our first quarterly year-over-year decline in revenue since the fourth quarter of 2009.”

Revenue dropped slightly due to a 1% decrease in total pounds per shipment and a 0.3% decrease in total tonnage year-over-year.

Old Dominion’s operating ratio continued to lead the industry at 82.3.

UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. XPO is No. 3, and YRC is No. 5. Old Dominion ranks No. 11, ArcBest is 12, Roadrunner is at No. 16 and Saia ranks No. 25.