Old Dominion Freight Line, Thomasville, N.C., announced that revenue and earnings increased during the third quarter of 2008.
Revenue rose 14.5% to $415.9 million for the third quarter of 2008 from $363.3 million for the third quarter of 2007. Net income and earnings per diluted share for this quarter both rose 16.7% to $23.4 million, or $0.63 per diluted share, from $20 million, or $0.54 per diluted share, for the third quarter of 2007. Old Dominion's operating ratio improved to 89.8% for the third quarter of 2008 from 90.6% for the third quarter of 2007.
Revenue increased 15.2% for the first nine months of 2008 to $1.20 billion from $1.04 billion for the first nine months of 2007. Net income for the first nine months of 2008 increased 2.7% to $57.6 million from $56.1 million, while earnings per diluted share increased 2.6% to $1.55 from $1.51. The company's operating ratio was 91.2% for the first nine months of 2008 compared with 90.4% for the first nine months of 2007.
"We are pleased with Old Dominion's performance in the third quarter in what was a challenging operating environment," said Earl Congdon, executive chairman. "We achieved solid revenue growth, improved our operating ratio and produced an increase in earnings per share that exceeded our expectations. We attribute our success in this difficult environment to our commitment to on-time and claims-free service, a strong focus on yield management and improved productivity."
ODFL's tonnage for the quarter increased 7.4% compared to the third quarter last year on an 8.4% increase in weight per shipment and a 0.9% decline in the number of shipments.
However, Congdon notes, "as the third quarter and early fourth quarter have progressed, the rate of tonnage growth has slowed each month sequentially, which we attribute to the continued deterioration and uncertainty in the domestic and global
economies. Revenue per hundredweight rose 7.2% in the third quarter, reflecting the impact of higher fuel prices on our fuel surcharges. Revenue per hundredweight, excluding fuel surcharges, declined 1.5% due substantially to the increase in weight per shipment and a 2.6% decrease in the length of haul.
"While we believe the competitive pricing environment may intensify in the fourth quarter, we are committed to maintaining our disciplined pricing philosophy."
The impact of higher fuel prices was responsible for most of the growth in operating supplies and expenses to 20.7% of revenue for the latest quarter from 17.2% for the third quarter last year, according to Congdon. "We more than offset this increase in our costs through the significant increase in revenue per shipment and operational efficiencies gained through the increase in weight per shipment, which resulted in improvements in our linehaul, pickup and delivery and dock productivity metrics. In addition, we continue to maintain a historically low cargo claims ratio as a result of our investments in technology and our focus on cargo claims prevention. The cumulative effect of these strong operating fundamentals contributed significantly to the improvement in our operating ratio for the quarter."
Congdon says ODFL's financial strength is a competitive advantage for the company. "Our seasoned team has managed through many economic cycles, so we are preparing for real estate and market share opportunities that are likely to arise from the slowing economy through acquisition or business gained from faltering competitors."
Revenue rose 14.5% to $415.9 million for the third quarter of 2008 from $363.3 million for the third quarter of 2007. Net income and earnings per diluted share for this quarter both rose 16.7% to $23.4 million, or $0.63 per diluted share, from $20 million, or $0.54 per diluted share, for the third quarter of 2007. Old Dominion's operating ratio improved to 89.8% for the third quarter of 2008 from 90.6% for the third quarter of 2007.
Revenue increased 15.2% for the first nine months of 2008 to $1.20 billion from $1.04 billion for the first nine months of 2007. Net income for the first nine months of 2008 increased 2.7% to $57.6 million from $56.1 million, while earnings per diluted share increased 2.6% to $1.55 from $1.51. The company's operating ratio was 91.2% for the first nine months of 2008 compared with 90.4% for the first nine months of 2007.
"We are pleased with Old Dominion's performance in the third quarter in what was a challenging operating environment," said Earl Congdon, executive chairman. "We achieved solid revenue growth, improved our operating ratio and produced an increase in earnings per share that exceeded our expectations. We attribute our success in this difficult environment to our commitment to on-time and claims-free service, a strong focus on yield management and improved productivity."
ODFL's tonnage for the quarter increased 7.4% compared to the third quarter last year on an 8.4% increase in weight per shipment and a 0.9% decline in the number of shipments.
However, Congdon notes, "as the third quarter and early fourth quarter have progressed, the rate of tonnage growth has slowed each month sequentially, which we attribute to the continued deterioration and uncertainty in the domestic and global
economies. Revenue per hundredweight rose 7.2% in the third quarter, reflecting the impact of higher fuel prices on our fuel surcharges. Revenue per hundredweight, excluding fuel surcharges, declined 1.5% due substantially to the increase in weight per shipment and a 2.6% decrease in the length of haul.
"While we believe the competitive pricing environment may intensify in the fourth quarter, we are committed to maintaining our disciplined pricing philosophy."
The impact of higher fuel prices was responsible for most of the growth in operating supplies and expenses to 20.7% of revenue for the latest quarter from 17.2% for the third quarter last year, according to Congdon. "We more than offset this increase in our costs through the significant increase in revenue per shipment and operational efficiencies gained through the increase in weight per shipment, which resulted in improvements in our linehaul, pickup and delivery and dock productivity metrics. In addition, we continue to maintain a historically low cargo claims ratio as a result of our investments in technology and our focus on cargo claims prevention. The cumulative effect of these strong operating fundamentals contributed significantly to the improvement in our operating ratio for the quarter."
Congdon says ODFL's financial strength is a competitive advantage for the company. "Our seasoned team has managed through many economic cycles, so we are preparing for real estate and market share opportunities that are likely to arise from the slowing economy through acquisition or business gained from faltering competitors."
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