Unpacking Q2 Earnings: Saia (NASDAQ:SAIA) In The Context Of Other Ground Transportation Stocks
In This Article:
Looking back on ground transportation stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Saia (NASDAQ:SAIA) and its peers.
The growth of e-commerce and global trade continues to drive demand for shipping services, especially last-mile delivery, presenting opportunities for ground transportation companies. The industry continues to invest in data, analytics, and autonomous fleets to optimize efficiency and find the most cost-effective routes. Despite the essential services this industry provides, ground transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.
The 16 ground transportation stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1%.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
While some ground transportation stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.3% since the latest earnings results.
Saia (NASDAQ:SAIA)
After realizing that there was more success in delivering produce rather than selling it, Saia (NASDAQ:SAIA) makes less-than-truckload deliveries in the United States.
Saia reported revenues of $823.2 million, up 18.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ earnings estimates.
Saia President and CEO, Fritz Holzgrefe, commented on the quarter stating, “During the quarter, we successfully opened six new terminals and relocated two others in new and established markets, while maintaining our high service standards. Successfully opening and relocating terminals required investments in employee hiring, training and other costs that come in advance of opening and revenue generation. We are pleased to see the continued customer acceptance of these facilities, as well as the 23 other terminals opened in the last three years. We are excited about the opening of our new Stockton, California and Davenport, Iowa terminals earlier this week, and as we move through the rest of 2024, we plan to continue executing on our opening timeline, with the potential to open an additional 10 to 13 new terminals this year.”