10:16 AM EST, 02/13/2025 (MT Newswires) -- (Adds share price move in first paragraph and National Bank reaction commentary in second and third paragraphs)

Mullen Group ( MLLGF ) , one of Canada's largest logistics providers, was at last look down more than 5% on Thursday after it reported a decline in fourth-quarter profit on lower than expected sales amid "very challenging market conditions" around demand in 2024 that the company doesn't see getting better this year.

National Bank said its initial take on the result is "neutral". The bank maintained its Outperform rating and $19.00 target as it reviews its forecast noting the company's 2025 financial targets ($2.2 billion in revenue and $350 million in EBITDA) introduced in December look to be unchanged. In the earnings press release, National noted, management indicates that it does not see end markets in 2025 being any better than 2024. Furthermore, the bank said, a looming tariff war and the resulting economic impact has injected some uncertainty into the outlook for trucking companies.

National nevertheless continues to see value in Mullen shares. It expects more details on the market outlook and the M&A pipeline on this morning's conference call.

Mullen, which said it is on the lookout for possible acquisitions, reported Q4 earnings per share adjusted of $0.33 versus $0.34 a year earlier. It also recorded Q4 EPS diluted of $0.21 versus 0.32, missing a FactSet estimate of $0.29.

It generated revenue of $499.1 million, up slightly from $498.6 million on incremental revenue from acquisitions being offset by less capital investment in Canada, continued soft freight demand and lower fuel surcharge revenue. But the FactSet estimate was for sales in Q4 of nearer $517 million

"It took a lot of hard work by everyone [last year]...to mitigate the very challenging market conditions," said Murray K. Mullen, chair and senior executive officer. "Not only was demand soft, but pricing pressures intensified, due to undisciplined competition. These were difficult issues to deal with, so for Mullen Group ( MLLGF ) to accomplish what we did last year, keeping revenues flat and improving operating income before depreciation and amortization, is something all of our business associates and teams can be proud of."

He continued: "From a demand perspective, I do not believe that 2025 will be any better than last year. The Canadian economy remains rangebound, at best, with downside risks emerging due to the potential for trade disruptions between Canada and the U.S. And, when you couple trade disruptions along with the fact that Canada is lagging in terms of capital investment, the only conclusion that I come to is that the demand for freight services will continue to underwhelm."

Price: 13.45, Change: -0.77, Percent Change: -5.41