Saia expects the reward of an investment of 2,000 million dollars

Less than truckload carrier Saia said it sees more tailwinds than headwinds for its business in the new year. The company has opened 39 terminals in the last three years, making it a true national airline. However, costs associated with expanding new locations again impacted quarterly results.

The Johns Creek, Georgia-based company reported fourth-quarter earnings per share of $1.77 before the market open Tuesday. The result was 38% lower year-over-year and 14 cents below the consensus estimate. The company noted $4.7 million in adverse claim developments during the period. Excluding costs, EPS would have been in line with expectations at $1.91.

An expanded network is allowing Saia to better compete for cargo transportation from national carriers, allowing it to increase density over time. However, taking on the additional costs has pushed the company’s margins to multi-year lows in recent quarters, a trend it hopes to reverse starting this year.

Saia’s (NASDAQ:SAIA) Q4 operating ratio of 91.9% (8.1% operating margin) was 480 basis points worse year-over-year and 430 bps worse than Q3. Management guidance anticipated 300 to 400 basis points of sequential deterioration. Incremental insurance costs were a drag of 60 basis points.

The fourth quarter could prove to be the low point even though winter storms have negatively impacted the first quarter, the seasonally weakest of the year.

Management said on a Tuesday call that the company typically posts 30 to 50 basis points of sequential OR deterioration from the fourth to the first quarter. It expects to surpass that rate of change this year, potentially recording sequential improvement, given the decreased baseline. The guidance could represent a year-over-year improvement from the 91.1% OR recorded in Q1 2025. (Saia’s outlook was provided using a Q4 adjusted OR of 91.3%, which excludes the impact of insurance.)

The company also calls for full-year margin improvement of 100 to 200 bps in 2026, with the upper end of the range tied to modest improvements in volume and performance. However, management still expects year-over-year margin improvement, even if the overall economy remains weak.

“With a capital investment of $2 billion, like we have implemented in this business, the returns we expect are less than OR80,” Fritz Holzgrefe, Saia’s president and CEO, said on the call.

He said some mature parts of the network currently operate operating rooms in the upper 70s.

The company’s shipping weight was offset in the second half of the year. It now has 20% to 25% excess door capacity and should be able to take part when the market changes. Industry consensus suggests that many regional operators are likely already limited in capacity, unlike national operators that have expanded their networks.

Management also hopes to price freight ahead of cost inflation following investments, which have significantly increased its service offering. Contractual rate increases averaged 4.9% in the fourth quarter (+6.6% in January). Customer retention is above 90% following an overall rate increase of 5.9% in October. The airline typically sees retention between 80% and 85% based on GRI.

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Saia reported fourth-quarter revenue of $790 million, which was up $1 million year-over-year and $14 million better than the consensus estimate. On a daily basis, revenue was stable as a 1.5% decline in tonnage was offset by a 1.6% increase in revenue per hundredweight or yield. Performance increased by 0.5%, excluding fuel surcharges.

The quarter had a difficult tonnage comparison with the same period last year (+8.3% year-on-year). On a monthly basis, tonnage decreased 3.3% year-on-year in October, 1.8% in November and 2.2% in December. Tonnage increased on a two-year basis throughout the quarter, from more than 4% in October to more than 11% in December.

Tonnage was 7% lower year-over-year in January, but that was compared to a more than 13.8% offset in January 2025. Additionally, inclement weather negatively affected the network during the month. Shipments declined 2.1% year over year in January, but management said they likely would have increased without the storms.

Performance compared more easily in the period (negative-2.3% in Q4 2024). A 1% decrease in shipment weight was a modest tailwind for the performance metric. Shipping revenue decreased 0.5% in the quarter, excluding fuel surcharges.

The 91.9% OR (91.3% adjusted) occurred when growth in cost per shipment exceeded growth in revenue per shipment by 560 bps.

Salaries, salaries and benefits expenses (as a percentage of revenue) increased 280 basis points year-over-year. The company implemented a 3% pay and benefit increase in October. The workforce was 5.1% lower year-on-year (6.4% lower excluding long-distance drivers). Increases in group health insurance costs accounted for more than 30% of the increase in cost per shipment.

Depreciation and amortization expenses were 110 bps higher. The new terminals operated profitably in 2025.

Net capital spending is expected to decline from $544 million in 2025 ($1.05 billion in 2024) to $350 million to $400 million in 2026.

SAIA shares fell 5.1% as of 3:05 p.m. EST on Tuesday compared to the S&P 500, which was down 0.1%. The stock is up 55% since the week before Thanksgiving, when trucking stocks began rising along with truckload spot rates.

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