Core Insights - The company is experiencing a generally stable truckload market with a lack of typical seasonal demand lift until late in the quarter, leading to lower truckload volumes than expected [2] - Despite a $125 million decline in truckload revenue, the company managed to grow adjusted operating income by $28 million through cost-cutting measures [1] - The company anticipates a stronger truckload market in 2026 due to capacity reductions and regulatory enforcement impacting lower-priced capacity [10][11] Financial Performance - In the fourth quarter, revenue excluding fuel surcharge decreased by 0.4%, and operating income declined by $51.5 million year-over-year, primarily due to noncash impairment charges of $52.9 million [15] - Adjusted operating income fell by 5.3% year-over-year, with GAAP earnings per diluted share showing a loss of $0.04 compared to a profit of $0.43 in the prior year [16] - The consolidated adjusted operating ratio was 94%, reflecting a 30 basis point increase year-over-year [16] Market Conditions - The truckload market is under pressure with a reduction in available capacity, which has led to a tightening spot market [2][12] - Regulatory enforcement has been a significant factor in reducing capacity, particularly affecting smaller carriers [11] - Market data trends indicate improved rejection rates and spot rates, suggesting potential for future growth [12][13] Operational Strategies - The company has made significant progress in cutting costs, maintaining cost per mile flat despite a 3.6% decline in miles [5][8] - Investments in technology and internal development are aimed at improving operational efficiency and revenue capture, with expected benefits to materialize in 2026 [9][28] - The company is focused on enhancing its network and operational capabilities to better position itself for earnings growth [6][9] Segment Performance - The LTL segment grew revenue by 7% year-over-year, although shipment growth was lower than previous quarters due to moderating demand [23] - The Logistics segment saw a revenue decline of 4.8% year-over-year, with gross margins pressured by sourcing difficulties [25] - The Intermodal segment improved its adjusted operating ratio by 140 basis points year-over-year, despite a revenue decline [29] Future Outlook - The company projects adjusted EPS for Q1 2026 to be in the range of $0.28 to $0.32, assuming stable conditions and seasonal trends [31] - There is optimism regarding the bid season, with expectations for improved contract rates as capacity continues to exit the market [62][65] - The company is prepared to leverage its scale and flexibility to capture opportunities as market conditions evolve [41][70]