Earnings Watch: Old Dominion Earnings Spike 21.4% in Second Quarter
One of the country’s leading LTL carriers, Old Dominion Freight Line scored high in the second quarter, reporting a 21.4% increase in earnings per diluted share to $1.19 on revenue of $839.9 million.
David Cullen・[Former] Business/Washington Contributing Editor
One of the country’s leading LTL carriers, Old Dominion Freight Line (NASDAQ: ODFL) scored high in the second quarter, reporting a 21.4% increase in earnings per diluted share to $1.19 on revenue of $839.9 million. Net income climbed 20.9%, reaching $94.4 million.
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The results, reported on July 27, are “likely to encourage investors to send Old Dominion roaring past its 52-week share price high of $100.71 in early trading today,” pointed out analysis posted by the Winston-Salem Journal.
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The newspaper’s writer contended that ODFL’s record performance “centers on gaining market share through adding and expanding [distribution] centers” since the less-than-truckload carrier “ships products more quickly and attracts more customers because it does not depend on a full trailer to make a profit.”
“Old Dominion produced strong financial results for the second quarter of 2017, which included a double-digit increase in revenue and an increase of more than 20% in earnings per diluted share," said David Congdon, vice chairman and CEO. "These were the best growth rates in revenue and earnings per share since our first quarter of 2015.”
Congdon said Q2’s 11.2% increase in revenue was driven by a 6.1% rise in LTL tonnage per day and a 5.1% increase in LTL revenue per hundredweight. “Excluding fuel surcharges, our LTL revenue per hundredweight increased 3.8%. We believe that the growth in LTL tonnage was attributable to the continued improvement in the domestic economy and the consistent execution of our long-term strategic plan of delivering superior service at a fair price.”
In addition, ODFL’s Q2 operating ratio improved 140 basis points to set a new company record of 80.9%. Congdon attributed this improvement generally to leverage created by the carrier’s accelerated revenue growth, which he said benefited from increases in both freight density and yield. “As a result, most of our operating costs improved as a percent of revenue when compared to the second quarter of 2016. “
Congdon noted that ODFL also achieved on-time deliveries in excess of 99% and a cargo claims ratio that improved to a new company record of less than 0.2% in Q2. “With revenue growth continuing into the third quarter, we intend to hire additional employees so that we can continue to deliver superior service and position ourselves to win additional market share," he stated.
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