TFI International NYSE: TFII reported first-quarter 2026 adjusted diluted earnings per share of $0.69, as management pointed to ongoing operating efficiency efforts and a focus on maintaining a “rock-solid balance sheet” to manage through the cycle.
Chairman, President, and CEO Alain Bédard said the company generated $124 million of free cash flow in the quarter following more than $800 million of free cash flow last year, which he described as “over $10 per share.” TFI paid $38 million in quarterly dividends during the period.
First-quarter results and segment performance
Bédard said total revenue before fuel surcharge was $1.7 billion, consistent with the prior-year quarter. Consolidated operating earnings were $97 million, representing a 5.7% margin, and net cash from operating activities was $122 million.
TFI also said it has streamlined its quarterly reporting approach and will discuss results primarily across three segments: less-than-truckload (LTL), truckload, and logistics.
- LTL: Revenue before fuel surcharge was $656 million, down 3% year over year, an improvement from a 10% decline in the fourth quarter. Adjusted operating ratio (OR) was 95.3, with operating income of $31 million compared with $47 million a year earlier. Return on invested capital (ROIC) was 11.6%, with management citing improvement through the quarter and into April.
- Truckload: Revenue before fuel surcharge was $673 million, up from $663 million in the prior-year quarter. Operating income rose to $56 million from $49 million, and OR improved 100 basis points to 92.7. ROIC was 6%. Bédard said revenue per truck per week (excluding fuel surcharge) grew 9% while truck count declined 7% as the company “increase[d] fleet productivity and shed excess equipment.”
- Logistics: Revenue before fuel surcharge was $388 million, up slightly year over year and up 8% sequentially. Operating income increased to $34 million from $31 million, equating to an 8.9% margin. ROIC was 12.4%.
Market conditions: tightening capacity and improving LTL trends
In Q&A, Bédard described a truckload market that is moving closer to balance, attributing the shift largely to a reduction in capacity. He said “the offer has been reduced month after month,” citing factors such as tighter CDL conditions and the closing of driving schools in the U.S. He also said TFI’s truckload operations are focused on industrial freight rather than retail, and that the company is “starting to see a change” as customers seek capacity and closer relationships.
In LTL, Bédard said the company is seeing improving trends and that it has “been a long time since we have some organic growth in that sector.” He said TFI expects “at least no negative” growth in the second quarter and believes LTL could grow organically “maybe a few points.” He pointed to improved stability in the commercial team and service improvement efforts, while acknowledging the company is “far from” perfect.
Chief Financial Officer David Saperstein provided detail on shipment trends, describing a major swing over the quarter: LTL shipments were down 10% year over year in January, but up 8% year over year in March, with April “looking similar to March.” Management attributed part of the first-quarter weakness to weather early in the quarter.
Second-quarter outlook and margin expectations
For the second quarter of 2026, TFI guided to adjusted diluted EPS of $1.50 to $1.60. For the full year, net capital expenditures excluding real estate are expected to be $225 million to $250 million, unchanged from prior expectations. Bédard said the company is not providing full-year guidance due to uncertainty, including trade and fuel-related variables.
Asked about the operational assumptions behind the second-quarter outlook, Saperstein said TFI expects sequential OR improvement (Q1 to Q2) across the company of 400 to 500 basis points, with segment expectations as follows:
- LTL: 600 to 700 basis points of sequential OR improvement
- Truckload: 200 to 300 basis points of sequential OR improvement
- Logistics: 75 to 125 basis points of sequential OR improvement
Bédard and Saperstein said LTL improvement is being driven by better volume exiting the quarter and pricing actions, along with the timing of a general rate increase (GRI) that was delayed and implemented in mid-March. They noted the GRI applied to about 25% of shipments. Saperstein also said the company’s GRI was “a little bit low relative to peers at only 3.9%.”
Pricing, service, and longer-term targets discussed
Bédard said TFI remains a discounted carrier versus some peers in U.S. LTL because service levels are not yet where they need to be. He said the company is on par with peers for next-day service, while “second and third day service” remain areas with issues the team is working to improve. He also described efforts to improve shipment handling, scanning, claims, and pickup performance, calling service the key to earning better pricing.
Management also discussed steps to improve freight mix in U.S. LTL, including moving away from “blanket rates” in certain 3PL business toward customer-specific pricing, and exiting unprofitable retail accounts that created excessive operating ratios. Bédard said transborder freight between the U.S. and Canada is a priority given its higher profitability relative to domestic shipments.
On truckload pricing, Saperstein said contract renewals in U.S. flatbed were occurring in the “high single digits to low double digits,” while renewals in Canada were “more like in the low single digits.” He added that TFI has approximately 20% to 25% spot exposure in U.S. flatbed, with spot rates also coming in higher, though management said it is primarily focused on contract business.
When asked about normalized margins in a better environment, Bédard outlined long-term targets discussed on the call. He said an LTL business “has to run” at an 80 to 85 OR in a normal environment. For specialty truckload, he said the company should be in an 82 to 86 OR range, and emphasized improving ROIC from the current 6% to “between 10%-15%” in a normal year. For logistics, he said the segment should be in the 86 to 88 OR range in a normal environment, with ROIC targets above 20% for both LTL and logistics.
Cash flow, tax rate, fuel, and capital allocation
TFI ended March with a funded debt-to-EBITDA ratio of 2.6, and management reiterated its focus on free cash flow and capital allocation.
Saperstein addressed tax-rate modeling, saying the company has a “permanent tax benefit” tied to its financing structure. He said the effective rate appeared low in the quarter because profit before tax declined while the benefit is fixed. He suggested modeling “something more in the maybe 24% range” for the rest of the year.
On fuel, Saperstein said the net income impact in March was “pretty neutral across TFI,” with a slight positive in LTL due to density in some parts of the network offset by a negative impact in truckload from rising fuel prices. Bédard also noted fuel working-capital dynamics in free cash flow, saying the company pays fuel on a short-term basis while customers pay in about 40 days, which pressured first-quarter free cash flow.
Regarding M&A, Bédard said market expectations for improving conditions have made sellers hesitant. As a result, he said TFI may focus on buybacks if valuation is attractive, or otherwise reduce debt and leverage. He also said the company expects to generate substantial cash flow as fuel dynamics normalize and reiterated that dividend growth remains part of the strategy.
Management highlighted an acquisition in logistics as a niche, value-added business focused on services such as warehousing, kitting, and sub-assembly in the auto sector, with the potential to expand into adjacent areas such as data centers and battery plants. Separately, the company cited growth in data center construction-related revenue, with Saperstein noting $21 million in revenue this quarter, up from $15 million in the fourth quarter and $8 million in the year-ago quarter.
In closing remarks, Bédard thanked investors and said the company looks forward to providing updates on progress throughout the year.
About TFI International NYSE: TFII
TFI International Inc NYSE: TFII is a leading North American transport and logistics company headquartered in Montreal, Quebec. The company operates through a network of subsidiaries that provide truckload, less-than-truckload (LTL), specialized freight, package and courier, and logistics services. By integrating these operations, TFI delivers comprehensive end-to-end solutions, including long-haul and regional transportation, expedited delivery, warehousing, and cross-border freight movement.
Originally founded in 1957 as a regional trucking outfit in Cabano, Quebec, TFI International has expanded significantly through a disciplined acquisition strategy.
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