Saia is excited about pricing opportunities for expanding its network
In the fourth quarter, Saia's Saia once again occupied market share, but profit margins fell as new business wins and terminals go online. The company is at the end of a fierce network growth program that has pushed it to national carriers serving all 48 consecutive countries. The focus now will shift to pricing and profit opportunities.
SAIA (NASDAQ:SAIA) defeated fourth-quarter expectations on Monday, reporting earnings per share of $2.84, 7 cents above consensus estimates but 49 cents below year-on-year. The debt terminal purchase caused by funds caused a $5.1 million swing from interest income to interest expenses this quarter, with earnings per share of y/y.
Management told analysts on a call Monday that the LTL market remains loose as the industrial complex sags and customers have options when available capacity is available. Saia expanded its network with a downturn, opening 21 terminals last year and relocating nine terminals. These increases include a $235.7 million portfolio obtained from Bankruptcy Yellow Company (OTC:yellq).
Saia reported revenues of $789 million in the fourth quarter, Y/y (a 3.3% increase per day) and any fourth quarter records. Three-quarters of the growth came from new terminals that had not yet been run best.
The daily income increase is an increase of 8.3% per day tonnage, partially offsetting a 5.4% decline in revenue per cent or a rate of return (down 2.3%, excluding fuel surcharge). The increase in tonnage is due to a 4.5% increase in daily shipments and a 3.7% increase in weight per shipment.
Saia continued to hold a share in the quarter, with tonnage increasing by 6.9%/year in October, 5.7% in November and 13.5% in December. The tonnage in January was also 13.5%. The two-year stacked COMP grew 20% in December and 17% in January, some of which were the highest since Yellow left.
The weight increase per shipment makes the yield measure lower. The yield is positive and can eliminate changes.
Management notes that pricing for the entire industry is still reasonable. It implemented a general interest rate of 7.9% in late October. Pricing for renewal contracts increased by an average of 7.9% in the quarter. The company said it is working to close every revenue gap it has in the rest of the market as service metrics improve, and now operates the national network.
“We still feel like we have a job to do. …We look at the board and we are cheaper than everyone else. Our footprint expands and our ability to do great work for clients in every market is an opportunity… (To) share, but charges appropriately for this.”