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01/10 19:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed but overall negative picture. While there is investment in network expansion and technology, financial performance shows declining EPS, increased costs, and lower tonnage. The Q&A reveals concerns about lower shipments, degraded operating ratio, and management's vague responses on future trends. Despite disciplined pricing and AI optimization efforts, the lack of clear positive guidance and operational challenges suggest a negative stock reaction.
Revenue $839.6 million, relatively flat compared to last year's third quarter, reflecting a 0.3% decrease year-over-year due to the macroeconomic landscape.
Operating Ratio 85.9%, adjusted to 87.6% after excluding one-time real estate transactions. Adjusted operating ratio increased by 250 basis points compared to 85.1% in the third quarter last year, primarily due to increased depreciation and self-insurance related costs.
Shipments per Workday Decreased 1.9% year-over-year, but improved 3.2% sequentially from the second quarter of 2025. The year-over-year decline reflects the softer overall LTL freight market.
Adjusted Cost per Shipment Increased 4.6% year-over-year, largely due to increases in depreciation and self-insurance related costs. Sequentially improved by 0.7% from the second quarter of 2025 due to cost management and operational efficiency.
Fuel Surcharge Revenue Increased by 2.1% year-over-year, accounting for 15.2% of total revenue compared to 14.8% a year ago, driven by a 1.8% increase in national average diesel prices.
Salaries, Wages, and Benefits Increased 0.7% year-over-year, primarily due to inflation in group health insurance and workers' compensation costs, partially offset by reduced wages as headcount decreased by 3%.
Purchase Transportation Expense Decreased by 9.5% year-over-year, accounting for 7.1% of total revenue compared to 7.8% in the third quarter of 2024, due to reduced non-asset truckload volume and LTL purchased transportation miles.
Fuel Expense Increased by 0.9% year-over-year, primarily due to a 1.8% increase in national average diesel prices.
Accident Claims and Insurance Expense Increased by 22.5% year-over-year, driven by the development of existing accident-related claims and inflationary increases in cost per claim.
Depreciation Expense $64 million, a 17.2% increase year-over-year, due to ongoing investments in revenue equipment, real estate, and technology totaling over $600 million in the last 12 months.
Tonnage per Workday Decreased 1.5% year-over-year to approximately 24,700 tons compared to approximately 25,000 tons in the third quarter of 2024.
Diluted Earnings per Share $3.22, down from $3.46 in the third quarter of 2024. Adjusted diluted earnings per share were $2.81, reflecting the impact of increased costs and flat revenue.
Expansion of footprint: Saia's ramping markets, consisting of 39 terminals opened since 2022, showed sequential growth and improved operating ratio by over 100 basis points compared to Q2 2025. 17 terminals completed their first year of operations, contributing to the overall improvement. Sequential revenue growth was observed in both legacy and ramping markets.
National network benefits: Saia's nationwide footprint has enabled deeper customer relationships and better service solutions. Over 70% of volume growth came from 1- and 2-day lanes, with over two-thirds of this growth from existing customers.
Cost control efforts: Sequential improvement in adjusted cost per shipment by 70 basis points from Q2 2025, despite headwinds from self-insurance and related costs. Total adjusted operating expenses increased by 2.6% year-over-year, but sequential cost management remained a focus.
Network optimization: Accelerated network optimization efforts since Q1 2025 improved efficiency across the national footprint, reducing shipment handling and enhancing service levels.
Operational performance: Achieved a cargo claims ratio of 0.54%, marking the fourth consecutive quarter below 0.6, a company record. Sequential improvement in operating ratio by 20 basis points compared to Q2 2025.
Pricing strategy: Implemented a General Rate Increase (GRI) of 5.9% on October 1, impacting 25% of operating revenue. This aligns with the strategy to drive returns on network and service investments.
Employee engagement: Introduced a 3% wage increase effective October 1, 2025, and achieved over 80% participation in the annual engagement survey for the third consecutive year, with improved engagement levels.
Economic Uncertainty: The economic backdrop continues to exhibit uncertainty, with customers awaiting a more certain environment, which could impact demand and revenue growth.
Insurance Costs: Self-insurance and related costs have increased, creating headwinds for cost management and operational efficiency.
Accident Claims and Insurance Expense: Accident claims and insurance expenses increased by 22.5% year-over-year, driven by inflationary increases in cost per claim and development of existing accident-related claims.
Depreciation Costs: Depreciation expenses increased by 17.2% year-over-year due to ongoing investments in revenue equipment, real estate, and technology, adding pressure to operating expenses.
Freight Market Conditions: The overall LTL freight market remains softer, with shipments per workday decreasing 1.9% compared to the prior year, reflecting weaker demand.
Fuel Costs: Fuel expenses increased by 0.9% year-over-year, driven by a 1.8% increase in national average diesel prices, adding to operational costs.
Revenue Growth Challenges: Third-quarter revenue was relatively flat, decreasing 0.3% compared to the prior year, indicating challenges in achieving revenue growth in a competitive and uncertain market.
Economic Environment: The company noted that the economic backdrop continues to exhibit trends seen throughout 2025, with customers awaiting a more certain environment.
Ramping Markets Performance: Ramping markets, consisting of 39 terminals opened since 2022, showed sequential growth and improved their operating ratio by over 100 basis points compared to the second quarter, now operating at a sub-95 OR.
Network Optimization: The company expects its national footprint to continue scaling, aligning with its long-term strategy of getting closer to customers, improving service levels, and providing solutions that meet customer needs.
Growth in 1- and 2-Day Lanes: Sequentially, over 70% of volume growth came in 1- and 2-day lanes across the network, with over two-thirds of that growth coming from existing customers.
General Rate Increase (GRI): A GRI of 5.9% was implemented on October 1, impacting approximately 25% of operating revenue. This increase is expected to drive returns on network and service investments.
Employee Wage Increase: A 3% wage increase for all employees was implemented on October 1.
Future Potential: The company believes it is in the early stages of realizing its full potential, leveraging investments in its network to become one of the largest players in the LTL industry.
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The earnings call presents a mixed but overall negative picture. While there is investment in network expansion and technology, financial performance shows declining EPS, increased costs, and lower tonnage. The Q&A reveals concerns about lower shipments, degraded operating ratio, and management's vague responses on future trends. Despite disciplined pricing and AI optimization efforts, the lack of clear positive guidance and operational challenges suggest a negative stock reaction.
The earnings call presents a mixed picture. Financial performance shows modest revenue growth, but the operating ratio has deteriorated. Product development is positive with new terminals, but they are only at breakeven. Market strategy reflects cautious customer sentiment. Expenses show both short-term and long-term cost management plans. Shareholder returns and guidance were not specifically addressed. The Q&A reveals management's confidence in long-term prospects but hesitancy on near-term specifics, leading to a neutral sentiment overall.
The earnings call highlights several concerns: increased expenses outpacing revenue growth, deteriorating operating ratio, and declining EPS. Despite record revenue, the lack of a share repurchase program and unclear guidance on profitability from new terminals weigh negatively. The Q&A reveals competitive pressures and uncertain market conditions, with management's vague responses further undermining confidence. Overall, the negative financial metrics and uncertainty suggest a negative stock price reaction.
The earnings call revealed increased operating expenses, a significant deterioration in the operating ratio, and a decline in EPS. Despite revenue growth, the cost structure is negatively impacted by rising employee costs and claims expenses. The Q&A highlighted management's vague responses and lack of clear guidance, indicating uncertainty. No share repurchase program was announced, and new markets are only at breakeven. These factors, combined with weak guidance, suggest a negative outlook for the stock price.
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