Saia posts lower 2Q earnings, higher revenue

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Saia Inc., a less-than-truckload carrier based in Duluth, Ga., today, July 24, reported second-quarter 2007 results.

Second-quarter 2007 compared to second-quarter 2006 results from continuing operations:

  • Revenues were $253 million, an increase of 12 percent over the prior year;
  • Operating income was $14.6 million compared to $17.0 million in the prior year, which included restructuring charges of $1.7 million;
  • Operating ratio was 94.2 vs. 92.4 in the prior year;
  • LTL tonnage was up 11.3 percent over prior year, as LTL shipments were up 13.9 percent with a 2.3 percent reduction in weight per shipment; and
  • LTL yield was up 1.2 percent over the prior year.
  • “Saia achieved solid top-line revenue growth, but did not achieve targeted margins,” said Rick O’Dell, president and chief executive officer. “We believe this was primarily due to the soft shipping environment, with costs further impacted by accident severity. In spite of reducing accident frequency versus the prior year quarter, this was a particularly difficult quarter for accident expense.”

    O’Dell said Saia plans to address the current environment through increased marketing efforts throughout its system, capitalize on growing synergy revenue and focus on cost initiatives to improve profits. “Despite the difficult market conditions, employees demonstrated their ability to deliver Saia’s reliable service to our customers,” O’Dell said.

    The recent acquisitions of The Connection and Madison Freight System expanded coverage in the states of Indiana, Ohio, Kentucky, Michigan and Wisconsin, and contributed to most of the revenue growth during the second quarter, the company said. Estimated operating losses from the expanded territory were slightly more negative than management’s original expectations due to difficult market conditions and higher-than-anticipated account turnover, according to Saia.

    However, synergy revenue to and from this geography exceeded management’s expectations, and Saia said margins should continue to improve due to the upgrade of the account mix and building density in synergy lanes going forward. The company expects the expanded geography to begin contributing positively to operating income in the fourth quarter of 2007 and continuing into 2008.

    Year-to-date 2007 results from continuing operations compared to year-to-date 2006:

  • Revenues were $485 million, an increase of 13 percent;
  • Operating income was $21.6 million, a decrease of 15 percent; and
  • Net income was $10.4 million, a decrease of 19 percent.
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