What's in Store for Old Dominion (ODFL) in Q1 Earnings?
Old Dominion Freight Line ODFL is scheduled to report first-quarter 2020 results on Apr 23, before market open.
The Zacks Consensus Estimate for first-quarter 2020 earnings has been revised downward by 1.8% in the past 60 days.
Given this backdrop, let’s discuss the factors that are likely to have made an impact on the company’s performance in the quarter to be reported.
Old Dominion’s first-quarter performance is likely to have been dented by a decline in LTL (Less-Than-Truckload) tonnage due to a soft freight environment. The Zacks Consensus Estimate for first-quarter LTL tonnage per day indicates a decline of 5.2%from the year-ago quarter’s reported figure. LTL shipments are also likely to have declined during the March-end period due to soft freight demand. Supply-chain disruptions due to the coronavirus pandemic are likely to have put pressure on the company’s first-quarter performance. Notably, another trucking company J.B. Hunt Transport Services’ (JBHT) volumes suffered, particularly in March, due to the outbreak.
Old Dominion Freight Line, Inc. Price and EPS Surprise
Old Dominion Freight Line, Inc. price-eps-surprise | Old Dominion Freight Line, Inc. Quote
Coming back to Old Dominion, operating ratio (operating expenses as a percentage of revenues) is likely to have suffered in the to-be-reported quarter mainly due to lackluster revenues. The Zacks Consensus Estimate for first-quarter operating ratio is pegged at 82%, which calls for a rise from 81% reported for the December-end quarter. Notably, a lower value bodes well.
However, LTL revenue per hundredweight is likely to have increased in the first quarter partly owing to favorable pricing. Evidently, the Zacks Consensus Estimate for first-quarter LTL revenue per hundredweight suggests 1% increase from the number reported in the fourth quarter of 2019.
What Does the Zacks Model Say?
The proven Zacks model does not conclusively predict an earnings beat for Old Dominion thius time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here . You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Old Dominion has an Earnings ESP of -0.57% as the Most Accurate Estimate is pegged at $1.11, lower than the Zacks Consensus Estimate of $1.12. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Old Dominion carries a Zacks Rank #3, currently.
Highlights of Q4 Earnings
In the last reported quarter, Old Dominion’s earnings of $1.8 per share surpassed the Zacks Consensus Estimate by 2 cents. Moreover, the bottom line fell 7.7% year over year. Quarterly revenues of $1,009.2 million also beat the consensus mark of $1,002.1 million, but dropped nearly 1.7%, year over year.
Stocks to Consider
Here are some stocks from the broader Zacks Transportation sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings.
Covenant Transportation Group, Inc. CVTI has an Earnings ESP of +10.00% and currently holds a Zacks Rank of 3.
Scorpio Tankers Inc. STNG has an Earnings ESP of +12.30% and currently has a Zacks Rank of 3.
Valaris plc VAL has an Earnings ESP of +0.63% and currently holds a Zacks Rank of 3.
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