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Old Dominion (ODFL) Down 0.2% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
Hanmi Financial (HAFC) delivered earnings and revenue surprises of 0.00% and -0.11%, respectively, for the quarter ended March 2019. Do the numbers hold clues to what lies ahead for the stock?

A month has gone by since the last earnings report for Old Dominion Freight Line (ODFL). Shares have lost about 0.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Old Dominion due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Earnings Beat at Old Dominion in Q4

Old Dominion Freight Line reported fourth-quarter 2018 earnings of $1.95 per share, which surpassed the Zacks Consensus Estimate of $1.74. Meanwhile, quarterly revenues of $1,026.9 million exceeded the consensus mark of $1,018.2 million and increased 15.2% on a year-over-year basis. Top-line growth was primarily driven by a 2.9% and 12.9% increase in LTL tons and LTL revenue per hundredweight, respectively.

In the quarter under review, LTL revenue per hundredweight was up 10.8%, excluding fuel surcharges. Also, LTL shipments improved 9.2%. However, LTL weight per shipment declined 3.3%.

Old Dominion exited the fourth quarter with cash and cash equivalents of $190.3 million. Debt-to-total capitalization ratio at the end of the quarter was 1.7% compared with 4% at the end of 2017.

Capital expenditures in the quarter totaled $118.4 million. For 2018, the metric came in at $588.3 million. The company expects capital expenditures to be $490 million in 2019. Of the total amount, $220 million is anticipated to be spent on real estate and service center expansion while approximately $175 million and $95 million is estimated to be spent on tractors and trailers, and technology and other assets, respectively.

During the quarter, the company rewarded $97.2 million to shareholders through dividends and buybacks.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Old Dominion has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Old Dominion has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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