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Why Is Old Dominion (ODFL) Up 11.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Old Dominion Freight Line (ODFL - Free Report) . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Old Dominion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Old Dominion in Q2
Old Dominion Freight Line’s earnings per share of $1.25 outpaced the Zacks Consensus Estimate by 22 cents. However, the bottom line contracted 13.2% year over year, mainly due to coronavirus-induced 15.5% year-over-year decline in total revenues to $896.2 million.
The top line, however, surpassed the Zacks Consensus Estimate of $894.9 million. The year-over-year revenue underperformance was due to a 12.1% decrease in LTL (Less-Than-Truckload) tons per day and a 3.8% reduction in LTL revenue per hundredweight as a result of a soft freight environment.
Other Details
In the quarter under review, Old Dominion reported a 12.1% drop in LTL tons. Moreover, LTL revenue per hundredweight excluding fuel surcharges dipped 0.5%. LTL weight per shipment rose 5.3%. However, LTL shipments were down 16.6%.
The company’s major revenue generating segment, LTL services, logged a total of $884.1 million, down 15.6% year over year. Revenues from other services fell 9.8% to $12.1 million. Total operating expenses decreased 15.7% to $697 million, mainly owing to the 13.5% reduction in costs pertaining to salaries, wages & benefits.
Despite the revenue deterioration, the operating ratio (operating expenses as a percentage of revenues) improved 10 basis points to 77.8%. Old Dominion exited the quarter with cash and cash equivalents worth $518.6 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in the reported quarter were $67.9 million. Old Dominion expects a capex of $265 million for 2020. Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the second quarter, Old Dominion rewarded its shareholders with $146.1 million through buybacks ($128.5 million) and dividends ($17.6 million).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 13.04% due to these changes.
VGM Scores
Currently, Old Dominion has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Old Dominion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Old Dominion (ODFL) Up 11.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Old Dominion Freight Line (ODFL - Free Report) . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Old Dominion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Old Dominion in Q2
Old Dominion Freight Line’s earnings per share of $1.25 outpaced the Zacks Consensus Estimate by 22 cents. However, the bottom line contracted 13.2% year over year, mainly due to coronavirus-induced 15.5% year-over-year decline in total revenues to $896.2 million.
The top line, however, surpassed the Zacks Consensus Estimate of $894.9 million. The year-over-year revenue underperformance was due to a 12.1% decrease in LTL (Less-Than-Truckload) tons per day and a 3.8% reduction in LTL revenue per hundredweight as a result of a soft freight environment.
Other Details
In the quarter under review, Old Dominion reported a 12.1% drop in LTL tons. Moreover, LTL revenue per hundredweight excluding fuel surcharges dipped 0.5%. LTL weight per shipment rose 5.3%. However, LTL shipments were down 16.6%.
The company’s major revenue generating segment, LTL services, logged a total of $884.1 million, down 15.6% year over year. Revenues from other services fell 9.8% to $12.1 million. Total operating expenses decreased 15.7% to $697 million, mainly owing to the 13.5% reduction in costs pertaining to salaries, wages & benefits.
Despite the revenue deterioration, the operating ratio (operating expenses as a percentage of revenues) improved 10 basis points to 77.8%. Old Dominion exited the quarter with cash and cash equivalents worth $518.6 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in the reported quarter were $67.9 million. Old Dominion expects a capex of $265 million for 2020. Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the second quarter, Old Dominion rewarded its shareholders with $146.1 million through buybacks ($128.5 million) and dividends ($17.6 million).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 13.04% due to these changes.
VGM Scores
Currently, Old Dominion has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Old Dominion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.