First look: TFI Truckload sparkles, but OR at LTL slips

TFI International has seen its Truckload operations outperform its less prominent LTL segment in the third quarter, sparking investor interest. Operating ratio and operating income for Truckload improved significantly, while LTL saw a decline in operating ratio. CEO Alain Bedard praised Truckload's "remarkably strong" performance, highlighting double-digit top line growth and nearly doubled operating income.

The company's overall operating ratio improved to 89.5% from 91.2% a year ago. Truckload's operating income rose 13.3% to $100.2 million, compared to LTL's 6.6% increase to $44.4 million. TFI's Logistics segment reported the highest operating income at $49.4 million. Diluted EPS was projected to surpass $1.28 in the fourth quarter, with expectations of $1.30 to $1.40.

LTL metrics, including revenue per hundred weight and revenue per shipment, deteriorated, contributing to the overall decline. Despite the weak freight market, Truckload revenue grew 142.1%. However, adjusted EBITDA and operating income in Truckload increased by 24.7% and 90%, respectively. The Truckload segment was smaller in size, with a 12% decrease in truck count and a 4.8% reduction in owner operators. Analysts will hear TFI's earnings call on Friday at 9:30 am EDT.