TFI International (NYSE:TFII) handily beat analysts’ expectations in the second quarter as the Canada-based trucking and logistics company’s U.S. LTL division — formerly UPS Freight — achieved a remarkable level of performance.
TFI reported adjusted net income of $137.2 million, or $1.44 per diluted share, on $1.83 billion in revenue. Analysts expected the company to earn $1.05 per share on $1.54 billion in revenue.
The strong performance came from across TFI’s businesses. But the biggest surprise came from the U.S. LTL, whose performance exceeded TFI’s own pre-announcement on July 13.
“Particularly gratifying is the performance of TForce Freight which has exceeded our operating ratio targets far ahead of schedule, and we have only just begun our work,” TFI CEO Alain Bedard said in a statement.
The division, operating as TForce Freight, achieved an adjusted operating ratio of 90.1%. It had already been on track to beat TFI’s own targets, when the company said in the pre-announcement that the division’s operating ratio would come in below 95%.
TFI U.S. LTL
Q2/21
Shipments (in thousands)
1424
Weight per shipment
1039
Tonnage (in thousands)
740
Revenue per hundredweight
$27.22
Revenue per shipment
338.29
OR%
90.1%
The company offered some clues in its financial results, saying it “has identified hundreds of low yield accounts and has already implemented actions on selected accounts to increase the quality of freight, with a focus on freight that fits the network and the company can serve efficiently.”
It suggests that TFI’s plans to target underperforming freight — which it laid out after closing the $800 million deal — are well underway. Even considering the highly favorable U.S. LTL market, the performance is still remarkable considering that UPS Freight struggled to be profitable.
TFI’s LTL division, now its largest operating segment, brought in $481.5 million in revenue during the quarter. Operating income came in at $202.6 million, which included a $122.9 million bargain purchase gain from the acquisition of UPS Freight.
The company reported growth across its other business segments, with double-digit increases in revenue and operating income.
Bedard will discuss the results with financial analysts during a call on Monday evening.
Read more
TFI says turnaround of UPS Freight successor running ahead of schedule
Done deal: TFI completes UPS Freight acquisition
TFI hints at closer UPS ties beyond their $800M deal