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Old Dominion (ODFL) Lays Out Mixed Update on LTL Segment

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Old Dominion Freight Line, Inc. (ODFL - Free Report) issued an update on the performance of its less-than-truckload (LTL) segment, the major revenue driver.

LTL tons per day increased 2.4% year over year in August owing to 5.9% increase in LTL weight per shipment. Consequently, revenue per day inched up 1.3% in the month. However, LTL revenue per hundredweight registered a decline.

On a quarter-to-date basis, LTL revenue per hundredweight dropped 0.9%, while LTL revenue per hundredweight excluding fuel surcharges rose 2.3%.

Notably, Old Dominion has been hurt by sluggish LTL demand for quite some time due to COVID-19. As an evidence, LTL tonnage slid 4.4% in 2019 from 2018-levels. This adversity was due to lower volumes on account of soft freight demand.  In first-half 2020, LTL shipments fell 10.3% and LTL tonnage declined 7.3%.

Apart from LTL segment update, Old Dominion recently announced that it has expanded its network by adding nine service centres in new and existing markets during the first half of 2020, bringing the total nationwide service centre count to 238.

Zacks Rank & Stocks to Consider

Old Dominion currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , United Parcel Service, Inc. (UPS - Free Report) and Werner Enterprises, Inc. (WERN - Free Report) . Knight-Swift sports a Zacks Rank #1(Strong Buy), while UPS and Werner carry a Zacks Rank #2(Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, UPS and Werner is pegged at 15%, 7.7% and 8.5%, respectively.

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