A month has gone by since the last earnings report for Old Dominion Freight Line (ODFL). Shares have lost about 2.5% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at Old Dominion in Q2
The company's earnings of $2.16 per share surpassed the Zacks Consensus Estimate of $2.11. Moreover, the bottom line improved 8.5% year over year.
Meanwhile, quarterly revenues of $1,060.7 million fell short of the consensus mark of $1,074.5 million but inched up 2.6% on a year-over-year basis. Results were partly affected by 6.3% decline in LTL (Less-Than-Truckload) tonnage due to soft freight environment. However, top-line growth was primarily driven by a 9.5% increase in LTL revenue per hundredweight. The major revenue generating segment — LTL services — logged revenues of $1.05 billion, up 2.8% year over year.
In the quarter, LTL revenue per hundredweight was up 10% excluding fuel surcharges. However, LTL shipments dipped 2.6%. Also, LTL weight per shipment slipped 3.8%. Meanwhile, operating ratio (operating expenses as a percentage of revenues) improved to 77.9% from 78.7% in the year- ago quarter on the back of greater efficiencies.
Old Dominion exited the second quarter with cash and cash equivalents of $228.96 million compared with $190.28 million at the end of 2018. Old Dominion's cash flow from operations in the quarter came in at $255.7 million.
Capital expenditures in the quarter totaled $159.2 million. The company continues to expect capital expenditures of $480 million in 2019. Of the total amount, $220 million is anticipated to be spent on real estate and service center expansion while approximately $165 million and $95 million are estimated to be invested in tractors and trailers, and technology and other assets, respectively. During the reported quarter, Old Dominion rewarded its shareholders to the tune of $147.8 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, 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 D on the value side, putting it in the bottom 40% 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.
Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, Old Dominion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
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