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Will LTL Revenues Boost Old Dominion's (ODFL) Q4 Earnings?
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Old Dominion Freight Line, Inc. (ODFL - Free Report) is scheduled to report fourth-quarter 2018 earnings numbers on Feb 7, before the market opens.
Last reported quarter, the company delivered a positive surprise of 7.6%. Moreover, the bottom line soared 71% on a year-over-year basis owing to a lower effective tax rate. Although the top line improved 21.2% year over year, it fell short of the Zacks Consensus Estimate. Notably, the company boasts an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5%.
Let’s see how things shape up for this announcement.
Why a Likely Positive Surprise?
Our proven model clearly shows that Old Dominion is likely to beat on earnings in the impending results on the back of a perfect combination of the following two key ingredients:
Earnings ESP: Old Dominion has an Earnings ESP of +1.85% as the Most Accurate Estimate stands at $1.77 while the Zacks Consensus Estimate is pegged lower at $1.74. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Old Dominion carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 when combined with a positive ESP have significantly higher chances of beating estimates.
Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Old Dominion Freight Line, Inc. Price and EPS Surprise
Similar to the last few quarters, the company’s major revenue generating segment, the LTL (Less-Than-Truckload) division, is expected to perform well in the fourth quarter as well, thereby driving overall growth. Notably, the company’s LTL tons per day increased 3.1% year over year in November, primarily owing to a 7% rise in LTL shipments per day. Also, LTL revenue per hundredweight rose 13.5% year over year as of Dec 6 in the fourth quarter.
Operating ratio (operating expenses as a percentage of revenues) is also likely to improve in the quarter under review. The Zacks Consensus Estimate for fourth-quarter operating ratio stands at 81%, lower than 84% reported in the year-ago period.
However, high capital expenditures are a cause for concern and might partly affect bottom-line growth. Additionally, escalating operating expenses due to a sharp rise in salaries, wages and benefits are likely to limit bottom-line improvement in the final quarter.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider Expeditors International of Washington, Inc. (EXPD - Free Report) , Copa Holdings, S.A. (CPA - Free Report) and Frontline Ltd. (FRO - Free Report) as these stocks too possess the perfect mix of elements to beat on earnings this reporting cycle.
Copa Holdings has an Earnings ESP of +8.41% and a Zacks Rank #2. The company will report fourth-quarter 2018 financial figures on Feb 13.
Frontline has an Earnings ESP of +38.46% and a Zacks Rank of 2. The company will announce fourth-quarter earnings numbers on Feb 28.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Will LTL Revenues Boost Old Dominion's (ODFL) Q4 Earnings?
Old Dominion Freight Line, Inc. (ODFL - Free Report) is scheduled to report fourth-quarter 2018 earnings numbers on Feb 7, before the market opens.
Last reported quarter, the company delivered a positive surprise of 7.6%. Moreover, the bottom line soared 71% on a year-over-year basis owing to a lower effective tax rate. Although the top line improved 21.2% year over year, it fell short of the Zacks Consensus Estimate. Notably, the company boasts an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5%.
Let’s see how things shape up for this announcement.
Why a Likely Positive Surprise?
Our proven model clearly shows that Old Dominion is likely to beat on earnings in the impending results on the back of a perfect combination of the following two key ingredients:
Earnings ESP: Old Dominion has an Earnings ESP of +1.85% as the Most Accurate Estimate stands at $1.77 while the Zacks Consensus Estimate is pegged lower at $1.74. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Old Dominion carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 when combined with a positive ESP have significantly higher chances of beating estimates.
Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Old Dominion Freight Line, Inc. Price and EPS Surprise
Old Dominion Freight Line, Inc. Price and EPS Surprise | Old Dominion Freight Line, Inc. Quote
Factors Likely at Play
Similar to the last few quarters, the company’s major revenue generating segment, the LTL (Less-Than-Truckload) division, is expected to perform well in the fourth quarter as well, thereby driving overall growth. Notably, the company’s LTL tons per day increased 3.1% year over year in November, primarily owing to a 7% rise in LTL shipments per day. Also, LTL revenue per hundredweight rose 13.5% year over year as of Dec 6 in the fourth quarter.
Operating ratio (operating expenses as a percentage of revenues) is also likely to improve in the quarter under review. The Zacks Consensus Estimate for fourth-quarter operating ratio stands at 81%, lower than 84% reported in the year-ago period.
However, high capital expenditures are a cause for concern and might partly affect bottom-line growth. Additionally, escalating operating expenses due to a sharp rise in salaries, wages and benefits are likely to limit bottom-line improvement in the final quarter.
Other Stocks to Consider
Investors interested in the broader Transportation sector may also consider Expeditors International of Washington, Inc. (EXPD - Free Report) , Copa Holdings, S.A. (CPA - Free Report) and Frontline Ltd. (FRO - Free Report) as these stocks too possess the perfect mix of elements to beat on earnings this reporting cycle.
Expeditors has an Earnings ESP of +0.39% and a Zacks Rank of 1. The company will release fourth-quarter 2018 results on Feb 19. You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an Earnings ESP of +8.41% and a Zacks Rank #2. The company will report fourth-quarter 2018 financial figures on Feb 13.
Frontline has an Earnings ESP of +38.46% and a Zacks Rank of 2. The company will announce fourth-quarter earnings numbers on Feb 28.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>