Less-than-truckload carrier Old Dominion Freight Line said its second-quarter results reflected “the ongoing softness in the domestic economy,” in a Wednesday news release.
Old Dominion (NASDAQ: ODFL) reported second-quarter earnings per share of $1.27, a penny light of the consensus estimate and 21 cents lower year over year. A decline in net interest income was nearly a 2-cent drag compared to the year-ago period.
Revenue fell 6% y/y to $1.41 billion and came in just slightly below consensus. A 9.3% y/y tonnage decline was the combination of a 7.3% drop in shipments and a 2.1% dip in weight per shipment.
Weaker volumes were partially offset by a 3.4% y/y increase in revenue per hundredweight, or yield. Yield was 5.3% higher excluding fuel surcharges. The decline in shipment weight was a modest tailwind to the yield metric.
Yield (excluding fuel) was up a little more than 10% on a two-year-stacked comparison.
Click for full report – “Old Dominion not changing course as downturn lingers”
“Old Dominion continues to manage through a difficult operating environment that has persisted for longer than anticipated,” said Old Dominion President and CEO Marty Freeman in the news release. “Although demand for our services continues to be impacted by a challenging economy, we remain confident that we are well positioned for the long term.”
The company reported a 74.6% operating ratio (inverse of operating margin), which was 270 basis points worse y/y and just 80 bps better than the first quarter. That compared to management’s guidance for approximately 100 bps of sequential improvement. (The carrier normally sees 300 to 350 bps of sequential margin improvement in the second quarter.)
Cost per shipment was up 5.1% with revenue per shipment up just 1.2%, a 390-bp negative spread.
Click for full report – “Old Dominion not changing course as downturn lingers”
Salaries, wages and benefits expenses (as a percentage of revenue) increased 210 bps y/y. A 4.8% decline in headcount was outpaced by a bigger step down in shipments. An increase in total employee benefit costs was also a headwind in the quarter.
Depreciation and amortization expenses were 80 bps higher y/y.
Shares of ODFL were down 5% in pre-market trading on Wednesday.
Old Dominion will host a conference call at 10 a.m. EDT on Wednesday to discuss second-quarter results.
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