ODFL net income, revenues soar in Q3

Less-than-truckload (LTL) carrier Old Dominion Freight Line ended the third quarter of 2017 with double-digit percentage increases in net income, revenues and diluted earnings per share, according to the company’s most recent financial statements.    Old Dominion Freight Line (ODFL) posted a net income of $102 million, up 19.6 percent compared to the same period in 2016.
   The less-than-truckload (LTL) company recorded revenues of $872 million, an 11.5 percent increase, with a 20.4 percent year-over-year increase in diluted earnings per share to $1.24 per share.
   “Old Dominion produced strong financial results during the third quarter of 2017, which included an 11.5 percent increase in revenue and a 20.4 percent increase in earnings per share,” said David S. Congdon, vice chairman and CEO of Old Dominion. “The strengthening economy supported our third quarter revenue growth, but we also believe that tightening industry capacity and pricing increases accelerated the pace of our revenue growth for September. Due to the upward trend in the industry pricing environment, our ability to deliver superior service at a fair price has become a critical competitive differentiator in the LTL industry. In addition, the consistent investments in our service center network and equipment provide us with the necessary capacity to win additional market share,” said Congdon. 
   The company’s revenue grew 11.5 percent for the third quarter, despite having one less operating day than in the third quarter of 2016. Congdon attributed this growth to an 8.6 percent increase in LTL tonnage per day, as well as a 3.6 percent increase in LTL revenue per hundredweight. 
   Capital expenditures stood at $100.5 million for the third quarter of 2017 and $288.8 million through the first nine months of the year. The company said it expects its capital expenditures for 2017 to total approximately $400 million, including planned expenditures of $185 million for real estate and service center expansion projects, $170 million for tractors and trailers, and $45 million for technology and other assets.
   “Consistent with the long-term performance of our company, the improvement in freight density and yield created operating leverage that resulted in a 120 basis-point improvement in our operating ratio for the quarter,” said Congon. “The increase in expense for salaries, wages and benefits reflects a 3 percent average wage increase provided to employees in early September 2017, as well as a 4.4 percent increase in the average number of full-time employees for the quarter.
   “Our team of dedicated employees continued to provide industry-leading customer service, which included on-time deliveries of 99 percent and a cargo claims ratio of 0.2 percent for the third quarter of 2017,” he added. “We intend to hire additional employees throughout the fourth quarter to increase the capacity of our workforce to support anticipated growth.”
   ODFL returned $9.1 million of capital to its shareholders in the third quarter of 2017 and $32.7 million for the first nine months of the year, leaving $192 million available for share repurchases under the company’s current $250 million stock repurchase program.
   “We remain committed to investing in our business to support future growth and are encouraged by recent shipment and tonnage trends that have continued thus far during the fourth quarter,” said Congdon. “We are confident that our proven strategy of delivering superior service at a fair price will continue to produce long-term growth in both our market share and shareholder value.”