The less-than-truckload motor carrier posted an on-time delivery rate of 99 percent during the quarter as well as higher net income and revenues.
Old Dominion Freight Line Inc.’s net income for the first quarter of 2018 soared 66.2 percent year-over-year to $109.3 million as it managed to improve its operating ratio and see a substantial reduction in its income tax rate due to the Tax Cuts and Jobs Act.
The Thomasville, N.C.-based less-than-truckload motor carrier reported an operating ratio of 83.9 percent for the quarter, compared to 85.8 percent for the first quarter of 2017.
Diluted earnings per share for the quarter totaled $1.33, compared to 80 cents for the first quarter of 2017.
Total revenues for the quarter stood at $925 million, surging 22.7 percent from last year’s first quarter. The sharp increase in revenues was primarily fueled by a 15.4 percent increase in LTL tons and a 5 percent boost in LTL revenue per hundredweight, Greg C. Gantt, Old Dominion’s president and COO, said in the earnings press release.
Adam Satterfield, senior vice president of finance and chief financial officer at Old Dominion, said during the earnings conference call, “Our growth continues to be supported by the strength of the domestic economy and general tightness of capacity within the transportation industry, which has created an environment where our business model shines.”
Old Dominion recorded an on-time delivery rate of 99 percent and a cargo claims ratio of 0.2 percent for the quarter, according to Gantt.
Gantt will transition to the combined role of president and CEO May 16. During the conference call, Gantt said, “I do not intend to deviate from the business strategies that have created our unique position in the industry and driven the significant long-term increase in shareholder value. We will continue to focus on providing superior service at a fair price while also continuously investing in capacity and our people to support our long-term growth objective.”
Old Dominion averaged 1,588 full-time employees during the quarter, up 11.9 percent year-over-year.
When asked about how headcount growth was less than tonnage growth and if that can be expected in the upcoming quarters, Gantt said during the call, “We are pushing very, very hard to hire to keep up with demand. And that is a daily challenge, but so far so good.”
When asked about tight truck capacity and if there was any noise about resurrecting the twin 33-foot trailer conversation in Washington, D.C., Gantt said although Old Dominion has seen some lanes where longer trailers could help the company, it will neither be a strong proponent nor an opponent. If twin 33s do come to pass, Old Dominion will figure out how and where to make the best use of them, he said.
The national standard for twin trailers is currently 28 feet for each trailer.
Overall, Old Dominion said it expects to spend a total of $555 million in capital expenditures in 2018, consisting of $310 million for tractors and trailers, $200 million for real estate and service center expansion projects and $45 million for technology and other assets.
Old Dominion moves up a gear in Q1
