Old Dominion posts record quarterly revenue, EPS and operating ratio despite weak macro conditions

Less-than-truckload (LTL) carrier Old Dominion Freight Line, Inc. (NASDAQ:ODFL) on Thursday posted record quarterly revenue, earnings per share and operating ratio in its second quarter despite year-on-year declines in tonnage, volume and average shipment weight, as its renowned yield management capabilities offset the impact of weaker industry demand.

Thomasville, North Carolina-based Old Dominion reported earnings per diluted share of $2.16, an 8.5 percent increase over year-earlier figures, and $0.05 per share above median estimates of analysts polled by Barchart. Revenue rose 2.6 percent to nearly $1.07 billion. Operating income increased 6.4 percent to $234.5 million, while net income increased 6.5 percent to $174 million.

Operating ratio, the ratio of revenues to expenses and a key measure of a carrier’s efficiency, dropped to 77.9 percent from 78.7 percent in the 2018 quarter. Effectively, Old Dominion spent 77.9 cents for every $1 in revenue in the quarter.

The revenue gains came from a 9.5 percent increase in revenue for every 100 pounds hauled, known in industry lingo as revenue per hundredweight, and a determinant of the company’s profitability. The higher yields overcame a 6.3 percent year-over-year decline in tonnage, a 2.6 percent drop in shipments and a 3.8 percent drop in weight per shipment. The decline in shipment weight was expected, the company said, adding that it expects shipment weight to trend higher during the second half of 2019.