Old Dominion Begins LTL Earnings Season on High Note, Profits Up 21% in 2Q
Old Dominion Freight Line Inc. kicked off the less-than-truckload quarterly earnings reports on an impressive note with a 21% rise in profits, ending 10 cents per share higher than the industry forecast.
The Thomasville, N.C., carrier recorded $98.4 million in profits or $1.19 per share. One year ago, it made $81.4 million or 98 cents.
The Bloomberg News consensus forecast of industry analysts called for $89.2 million or $1.09 for the three month period ending June 30, 2017.
Revenue increased to $840 million from $755.4 million one year ago.
“These were the best growth rates in revenue and earnings per share since our first quarter of 2015. The 11.2% increase in revenue for the second quarter was driven by a 6.1% increase 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%,” CEO David Congdon said. “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.”
He added: “Old Dominion’s robust second-quarter operating and financial performance highlighted many of the core strengths of our business model. We are encouraged by these results as well as our revenue growth trends and the momentum of the domestic economy.”
Nearly every major category tracking the LTL’s performance was better this past quarter than in 2016, except for a 12-mile drop in the average length of haul. Nevertheless, total intercity miles, another distance-based metric, improved 3.6% to 151 million miles.
Tonnage per day went up to 33,563 from 31,641. Total shipments grew 5.6% to 2.7 million. Revenue per shipment, excluding fuel surcharges, rose 4.3% to $269.92.
Even the weight per shipment eked out a small 0.5% gain to 1,567 pounds, despite the fact that many LTL carriers have experienced a drop in the category in recent years due to e-commerce. The online retail supply chain often consists of more frequent but less dense shipments on average.
The operating ratio improved 140 basis points to 80.9% in the second quarter, which the company announced was an all-time record.
In the first half of 2017, revenue went up 8.9% to $1.6 billion and profits were $164.2 million, 16% higher than the same time last year.
Old Dominion ranks No. 11 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
