TFI International (TFII, Financial) reported first-quarter revenue of $1.96 billion, falling short of market expectations of $2.06 billion. Despite the revenue miss, the company demonstrated a strong year-over-year increase of 40% in free cash flow, showcasing its financial resilience amid challenging industry conditions.
CEO Alain Bedard emphasized the company's commitment to its core operating principles, which focus on maintaining robust free cash flow. This approach has allowed TFI International to make strategic investments and improve operating ratios in several business segments, despite facing widespread freight demand challenges.
The company remains dedicated to returning value to shareholders, evidenced by its ongoing dividend program and significant share repurchases during the quarter. These efforts are part of TFI International's broader strategy to enhance long-term shareholder value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for TFI International Inc (TFII, Financial) is $119.78 with a high estimate of $166.09 and a low estimate of $89.00. The average target implies an upside of 52.72% from the current price of $78.43. More detailed estimate data can be found on the TFI International Inc (TFII) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, TFI International Inc's (TFII, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for TFI International Inc (TFII, Financial) in one year is $131.99, suggesting a upside of 68.29% from the current price of $78.43. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the TFI International Inc (TFII) Summary page.
Key Business Developments
Release Date: February 20, 2025
- Revenue Before Fuel Surcharge: $1.8 billion, up 9% year-over-year.
- Operating Income: $160 million, down from $198 million.
- Operating Margin: 8.8%, down from 11.8% the previous year.
- Adjusted Net Income: $102 million, down from $148 million.
- Adjusted EPS: $1.19, down from $1.71.
- Cash from Operating Activity: $262 million, down from $303 million.
- Free Cash Flow: $208 million, down from $244 million.
- LTL Revenue Before Fuel Surcharge: $737 million, down 10%.
- LTL Operating Income: $70 million, up 34%.
- Truckload Revenue Before Fuel Surcharge: $693 million, up from $399 million.
- Truckload Operating Income: $60 million, up from $51 million.
- Logistics Revenue Before Fuel Surcharge: $410 million, down from $472 million.
- Logistics Operating Income: $43 million, down from $55 million.
- Debt Reduction: Reduced by $156 million.
- Dividend Increase: 13% increase to $0.45 per share.
- Share Repurchase: $42.4 million worth of shares repurchased.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TFI International Inc (TFII, Financial) reported strong free cash flow of more than $200 million during the fourth quarter, bringing the full-year total to over $750 million.
- The company successfully reduced its debt by $156 million during the quarter, ending the year with a funded debt-to-EBITDA ratio of 2.11.
- TFI International Inc (TFII) completed a bolt-on acquisition and increased its quarterly dividend by 13% to $0.45 per share.
- The acquisition of Daseke contributed to a 9% growth in total revenue before fuel surcharge, reaching $1.8 billion for the fourth quarter.
- The company is planning to redomicile from Canada to the US to better align with its shareholder base and commercial presence, which could offer strategic advantages.
Negative Points
- Operating income for the fourth quarter decreased to $160 million from $198 million, with the operating margin dropping to 8.8% from 11.8% the previous year.
- Adjusted net income fell to $102 million from $148 million, and adjusted EPS decreased to $1.19 from $1.71.
- The company faced unusually high accident-related expenses, which were about $9 million higher than the prior year period.
- TFI International Inc (TFII) experienced a decline in logistics revenue, which was down from $472 million to $410 million year-over-year.
- The company is facing challenges in its US LTL operations, with a high claims ratio and issues with cost management and density.
