The less-than-truckload carrier Old Dominion Freight Line Inc. reported better profit and revenue in the first quarter of the year while UPS Inc. reported earnings showing growth across its business segments
Old Dominion said net income increased 9.1% from a year ago to $65.6 million, or from 72 cents per share to 80 cents per share, beating analysts’ expectations by 1 cent. Revenue moved higher by 6.6%, totaling $754.1 million.
“Our revenue growth was driven by a 4.9% increase in LTL revenue per hundredweight and a 2.4% increase in LTL tons per day for the quarter,” said David S. Congdon, vice chairman and CEO. “LTL revenue per hundredweight, excluding fuel surcharges, increased 2.4% even as the changes in the mix of our freight put downward pressure on this yield metric.”
He said the company is encouraged by the increased economic momentum seen in the first quarter, which supported the increases in freight density and yield that helped ODFL improve its operating ratio.
“Given our premium service offering and network capacity, we are well-positioned to leverage the opportunities that a growing economy would produce,” Congdon said.
UPS Profit Tops $1.1 Billion
UPS Inc. reported earnings showing growth across all of its three business segments, while beating Wall Street expectations.
Net income increased 2.4% to $1.158 billion, or from $1.27 per share a year earlier to $1.32 per share in the most recent quarter, 3 cents better than a consensus estimate from analysts. Total revenue improved 6.2% to $15.3 billion.
According to the company, the improved per-share result was due to a 22% increase its supply chain and freight segment operating profit, strong underlying performance in the international segment and solid results in the domestic segment, plus the favorable tax impact of adopting a new stock compensation accounting standard.
“We are extremely pleased with the growth and margin enhancing performance of the supply chain and freight segment this quarter,” said David Abney, UPS chairman and CEO. “The team has been working on growth initiatives, cost reduction programs and business unit portfolio strategies to address unique market conditions for the last several quarters. These initiatives showed excellent progress.”
Supply chain and freight revenue increased 13% from a year ago to $2.7 billion as operating income improved 21.8%, hitting $179 million. The segment also reported improvements in less-than-truckload revenue per hundredweight, as well as in shipments per day and weight per shipments.
The company’s domestic package segment benefitted from strong demand for e-commerce deliveries and revenue was up 5% over a year earlier, totaling $9.5 billion. Operating profit was trimmed slightly to $1.1 billion, due to facility construction and plans announced earlier this year to offer Saturday service in certain markets, which increased operating costs by approximately $35 million during the quarter.
UPS’ international package segment increased revenue by 4.9% to $3.1 billion though operating profit declined 7.8% to $529 million.