Profits Jump Sharply for LTL Carriers as Shipment Volumes Increase in 4Q
This story appears in the Feb. 9 print edition of Transport Topics.
Fourth-quarter profits rose sharply at five publicly traded less-than-truckload carriers, buoyed by strong shipment growth across the sector.
Profit jumped 55% at Con-way Inc.’s Freight unit and 49% at ArcBest Corp.’s ABF Freight. Earnings climbed 48% at Old Dominion Freight Line Inc. and rose to $6.2 million from $400,000 at YRC Worldwide Inc. Saia Inc.’s profit before interest and taxes climbed 40%.
The only LTL operator to report weaker results was Roadrunner Transportation Systems, whose profit before interest and taxes in that sector fell 46%.
“Con-way Freight achieved growth in revenue and significantly higher operating income . . . on the strength of ongoing revenue-management efforts bolstered by a stable demand and pricing environment,” CEO Douglas Stotlar said in a statement.
Con-way Freight’s results helped the company raise net income to $24.9 million, or 43 cents per share. Earnings were $11.7 million, or 20 cents, a year earlier. Con-way Inc. ranks No. 4 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
The company profited from a $1.6 million tax benefit in the 2014 period and a $9.7 million tax expense in the year-earlier period.
Profit at Con-way’s Menlo Logistics unit before interest and taxes more than doubled, and Con-way Truckload improved 20%.
YRC, No. 5 on the for-hire TT100, made the final LTL earnings report late Feb. 5. Revenue rose 0.8% to $1.22 billion. Net income was 16 cents per share.
Nationwide unit YRC Freight profit before interest and taxes of $24.5 million reversed a $15.4 million loss in the prior-year period. YRC Regional profit on that basis slipped 53% to $10.6 million.
Old Dominion, No. 12, said earnings reached $69.9 million, or 81 cents, helped by a 17% rise in shipments handled. Revenue rose 22% to $721 million, and shipments increased 17%.
CEO David Congdon said in a statement the results “reflect improved freight density and yield.”
ArcBest Corp.'s net income rose 41% to $14.5 million, or 53 cents, led by higher LTL unit profit.
Corporate revenue at No. 13 ArcBest climbed 15% to $664.8 million.
ABF Freight revenue rose 11% to $485.9 million. ArcBest’s non-asset-based businesses raised profit before interest and taxes by 15% to $5.6 million as revenue rose 25%.
“We made significant progress this year getting ABF Freight on a firmer path toward sustained, historical profitability,” ArcBest CEO Judy McReynolds said in a statement.
No. 25 Saia reported net income rose 68% to $13.6 million, or 53 cents, helped by a tax benefit.
Revenue increased 11% to $306.9 million from the 2013 quarter, when net income was $8.1 million, or 32 cents.
Tonnage was 4.3% higher, and rates per 100 pounds of freight increased 6%.
Results at No. 21 Roadrunner were bailed out by 71% higher truckload profit. The company’s net income rose 10% to $32.4 million, or 32 cents, while revenue, which reflected multiple acquisitions, rose 45% to $532.1 million.
Truckload profit before interest and taxes increased to $19.7 million, and revenue soared 73% to $311.5 million. LTL profits shrank to $2.8 million, despite 4% higher revenue of $140.9 million.
Growth was tempered at several carriers by lower fuel surcharge revenue. Old Dominion said that decline sliced revenue-per-hundredweight growth in half.
Con-way acknowledged fourth-quarter “negative impact” from fuel surcharges without specifying an amount.
Con-way Freight, ABF Freight and YRC last week changed fuel-surcharge calculations on noncontract loads, which typically affect about 25% of freight.
An analyst report from Deutsche Bank suggested their shift to begin fuel-surcharge calculations on a higher base price could add as much as 3 percentage points to earnings, compared with the fourth quarter.
