雅虎香港財經 TFI International Inc. (NYSE:TFII) Q1 2024 Earnings Call Transcript
TFI International Inc. (NYSE:TFII) Q1 2024 Earnings Call Transcript April 26, 2024
TFI International Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to TFI International's First Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Callers will be limited to one question and a follow-up. Again, that's one question and a follow-up so that we can get to as many callers as possible. Further instructions for entering the queue will be provided at that time. Please be advised that this conference call will contain statements that are forward-looking in nature and subject to a number of risks and uncertainties that can cause actual results to differ materially. Also, I'd like to remind everyone that this conference call is being recorded on Friday, April 26, 2024. I will now turn the conference call over to Alain Bédard, Chairman, President and Chief Executive Officer of TFI International. Please go ahead, sir.
Alain Bédard: Well, thank you, operator, and welcome everyone to today's call. Our results, released yesterday after the close, show continued performance to start the new year in the context of a particularly weak freight environment. Our self-help opportunities, along with the continued hard work of our many talented team members, have again helped TFI International deliver solid performance. Especially during weaker freight cycles, we sharpen our focus on the long-held operating principle that we -- that have helped TFI expand rapidly over the years through organic growth and very strategic M&A, while always maintaining a strong financial foundation through our emphasis on profitability and cash flow. We then use our excess cash to intelligently invest and return excess capital to shareholders when possible.
Starting with a high-level overview. During the first quarter of the year, we produced operating income of $152 million versus $166 million a year earlier, with an operating margin of 9.4% relative to 10.7%. Our adjusted net income of $106 million was down from $116 million in the first quarter of 2023, and our adjusted EPS of $1.24 was down from $1.33. We produced just over $200 million in net cash from operating activities versus $232 million last year, and we generated positive free cash flow of $137 million relative to $196 million. Taking a step back, I'd like to point on these results. First, they reflect a solid performance given the economic cycle of the US LTL business, which is picking up steam. The ongoing transformation is rooted in our overreaching focus on service quality and revenue per ship.
In particular, we saw tonnage inflect positive in the quarter, leading to a 12% increase in revenue per shipment. A second observation is that we see very tangible opportunity ahead to drive much stronger LTL results. There remain much work to do on cost all while being only in the early innings of our service-driven sustainable top-line improvement program. With that overview, let's take a closer look at each of our four business segments. P&C now represents 6% of our segment revenue before fuel surcharge. As you know, this market is experiencing softer volume across the industry and our revenue before fuel surcharge was down 8%, driven primarily by a lower weight per shipment and slightly fewer shipments. Our P&C operating income came in at $18 million or a margin of 18%, down from $27 million or a margin of 24% in the prior-year quarter on lower operating leverage.
Our return on invested capital was still a very solid 25.7%. Moving on to LTL, which is 42% of segment revenue before fuel surcharge, we generated revenue before fuel surcharge that was down 1% over the past year, while our operating income, despite lower gain on assets held for sale, actually grew significantly to $67 million, which was up 15%. This reflects a 140 basis point increase in our operating margin. Looking more closely at these strong results, our Canadian LTL revenue before fuel surcharge grew 8% year-over-year on a 9% increase on shipments and our claim ratio remained low at 0.2%. Return on invested capital for Canadian LTL was 19.1%. Turning to US LTL. Revenue before fuel surcharge of $552 million was down 3% over the past year, with the decline driven by our asset-light operation GFP.
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