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Old Dominion's (ODFL) Q3 Earnings & Revenues Top Estimates

Zacks Equity Research
·4 min read

Old Dominion Freight Line’s ODFL third-quarter 2020 earnings per share of $1.71 outpaced the Zacks Consensus Estimate by 20 cents. Moreover, the bottom line surged 24.8% year over year. The upside was driven by record improvement in operating ratio (operating expenses as a percentage of revenues) on the back of the company’s cost containment efforts.

Revenues of $1058.2 million surpassed the Zacks Consensus Estimate marginally and increased year over year on a 1.3% rise in LTL (Less-Than-Truckload) tons per day.

Management stated in the press release that all prior-period share and per share data are adjusted to reflect the three-for-two stock split effectuated in earlier this year.

Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise

Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise
Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise

Old Dominion Freight Line, Inc. price-consensus-eps-surprise-chart | Old Dominion Freight Line, Inc. Quote

Other Details

In the quarter under review, Old Dominion reported a 1.3% increase in LTL tons. Moreover, LTL revenue per hundredweight, excluding fuel surcharges, inched up 2.6%. LTL weight per shipment and LTL revenue per shipment rose 4.5% and 4%, respectively. However, LTL shipments were down 3.1%.

The company’s major revenue-generating segment, LTL services, logged a total of $1044.6 million, increasing marginally year over year. Revenues from other services increased 1.2% to $13.5 million. Total operating expenses fell 5.2% to $787.9 million, mainly owing to the 1.6% reduction in costs pertaining to salaries, wages & benefits and 23.1% reduction in operating supplies & expenses.

Moreover, operating ratio improved 480 basis points to 74.5%. Notably, the lower the value of this metric, the better.

Old Dominion exited the quarter with cash and cash equivalents worth $420.4 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in the reported quarter were $46.3 million. Old Dominion expects a capex of $240 million for 2020. Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $25 million on tractors/trailers, and technology and other assets, respectively.

During the third quarter, Old Dominion, currently carrying a Zacks Rank #2 (Buy), rewarded its shareholders with $17.6 million through cash dividends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sectorial Snapshot

Apart from Old Dominion, let’s take a look at some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines DAL , J.B. Hunt Transport Services JBHT and  United Airlines Holdings, Inc. UAL.

Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. Meanwhile, Delta reported earnings of $2.32 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, wider than the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and also lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to an 84.3% drop in passenger revenues to $1,649 million.

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