TFI International's Q3 Earnings Report: Mixed Bag with Higher Margins

TFI International's Q3 earnings beat Wall Street estimates on the bottom line, but most operational metrics in its LTL division, including US operations, were lower compared to Q2 2024. CEO Alain Bedard cited "strong" free cash flow and "solid margin performance," boosting TFI stock by 6.25%. The operating ratio at US LTL ballooned to 94% from 90.8%, while Canadian LTL saw a 500 bps decline in OR. Total revenue fell 9.4% YoY to $1.8 billion.

TFI International Inc. (NYSE and TSX: TFII) reported its third-quarter earnings on July 2, 2025, with a mixed bag of results across its segments. While the company's bottom line exceeded Wall Street estimates, most operational metrics in its Less-Than-Truckload (LTL) division, including US operations, were lower compared to Q2 2024.

Key Financial Highlights:
- Total revenue fell by 9.4% year-over-year (YoY) to $1.8 billion.
- Operating income decreased to $170.2 million, down from $206.0 million in Q2 2024.
- Net income dropped to $98.2 million, compared to $115.7 million in the prior year period.
- Adjusted net income, a non-IFRS measure, was $112.0 million, or $1.34 per diluted share, compared to $145.6 million, or $1.71 per diluted share, in Q2 2024.

Segment Performance:
- The LTL division saw a decline in operational metrics, with the operating ratio (OR) in US LTL ballooning to 94% from 90.8% in Q2 2024. Canadian LTL saw a 500 bps decline in OR.
- Revenue before fuel surcharge in the LTL segment decreased by 13% YoY, while operating income in the segment fell by 33%.
- The Truckload and Logistics segments also experienced revenue declines, with Truckload revenue down 6% and Logistics revenue down 12%.

Free Cash Flow and Margin Performance:
CEO Alain Bédard highlighted the company's strong free cash flow and solid margin performance. Free cash flow increased by 20% to $182.3 million, driven by reduced capital expenditures and strategic investments.

Stock Performance:
TFI International's stock price surged by 6.25% following the earnings report, reflecting investor confidence in the company's ability to navigate challenging market conditions and maintain strong financial performance.

Forward-Looking Statements:
The company warned that actual results could differ materially from those expressed in any forward-looking statement due to factors such as competitive market conditions, driver recruitment and retention challenges, fuel price variations, and environmental regulations.

Reference List:
[1] https://www.theglobeandmail.com/investing/markets/stocks/TFII-N/pressreleases/33692863/tfi-international-announces-2025-second-quarter-results/