Q: TFII reported earnings that beat estimates but were down from the previous period. What lies ahead for TFII? Will the recent momentum be maintained? Was there anything in the call that surprised you, either positive or negative? Is this a time to increase a position?
5i Research Answer:
EPS of 69c beat estimates of 61c; revenue of $1.95B beat estimates of $1.89B. EBITDA of $241M matched estimates. Four brokers have already upgraded their ratings or target post-earnings. Q2 guidance of $1.50+ was nicely ahead of current estimates ($1.31). Revenue fell 0.5% year over year and earnings fell from 76c, but the results were better than expected as was guidance. The dividend was increased 4%. On the call, TFII noted the market is tightening up (good) but it is not ready to give full year guidance. Fuel surcharges are being accepted. It continues to look for acquisitions. This quarter should keep momentum going. We would hold for now, with the stock now at 27x earnings and likely to consolidate recent gains a bit, we think.