Old Dominion drives record first half

   The less-than-truckload carrier Old Dominion Freight Line said Thursday it had a record second quarter and first half 2012 revenue and operating margin.
   The carrier saw operating profit in the second quarter rise 27.8 percent year-on-year to $82.6 million on a 12.8 increase in revenue to $541.5 million. Net income in the quarter rose 21.5 percent to $47.8 million.
   For the first half, Old Dominion’s operating profit grew 33.4 percent to $136.8 million on revenue that rose 15 percent to $1 billion. Net income in the first half was $78.9 million, 29.5 percent higher than the corresponding period in 2011.
   Old Dominion’s tonnage rose 9 percent in the second quarter and 9.8 percent for the first half. Its average length of haul dropped in both periods by around 1.5 percent to 940 miles.
   “Old Dominion’s second-quarter performance was truly exceptional as we set quarterly records for our revenue, margins and earnings per diluted share,” said David S. Congdon, Old Dominion’s president and chief executive officer. “During the second quarter, we continued to build significant momentum in efficiency and profitability, while continuing to win additional market share. We attribute our continued success to our highly efficient operating structure and our commitment to provide industry-leading service at a fair and equitable price. We are excited about the opportunity these fundamentals provide, which should allow us to further expand our market share and achieve our long-term growth objectives.
   “Increased market share drove additional tonnage and density through our service center network and, combined with favorable pricing, was primarily accountable for the 180 basis point comparable-quarter improvement in our operating ratio to 84.7 percent for the second quarter of 2012. This quarterly operating ratio is the best we have ever produced in our 78-year history, and we believe it is one of the best ever produced by a public less-than-truckload carrier with national coverage. Rising productivity also contributed to the improvement in our operating ratio, with efficiency gains made in our linehaul, pickup and delivery and platform operations,” Congdon said.
   The investment bank Stifel Nicolaus lauded Old Dominion relative to its peers in the LTL space.
   “Old Dominion continues to march along as the best-run public LTL carrier, benefiting from both market share gains and an improving LTL pricing environment,” the bank’s transportation and logistics research group said in a note about the company’s second quarter and first half earnings. “Market share gains came in all regions of the U.S. and in all lengths of haul, although its regional business grew faster than its long-haul business, driving down average length of haul 1.4 percent year-on-year.
   “The company’s long-standing focus on price discipline and understanding its costs and controlling its costs, as well as its strategic investment in an integrated multi-regional network, has given it what we believe to be a significant sustainable margin advantage over its peer group,” the bank added. “Put simply, by running a better business than competitors, it can offer a better service at a competitive price and retain more of the revenue for shareholders.” – Eric Johnson