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Old Dominion Freight Line, Inc. (ODFL) - free report >>
Knight-Swift Transportation Holdings Inc. (KNX) - free report >>
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Old Dominion Freight Line, Inc. (ODFL) - free report >>
Knight-Swift Transportation Holdings Inc. (KNX) - free report >>
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Declining LTL Tonnage Hurts Old Dominion (ODFL) Amid Low Debt
We recently issued an updated report on Old Dominion Freight Line, Inc. (ODFL - Free Report) .
The sluggish freight environment is a major concern for the company. As an evidence, LTL tonnage declined 4.4% in 2019 from 2018 levels. The metric declined 4.4% year over year in the first nine months of 2020. The adversity is due to lower volumes on account of soft freight demand. LTL shipments slipped 7.8% in the first nine months of 2020.
Effect of coronavirus on second-quarter results were more severe than the first. In the third quarter too, LTL service revenues were weak. Revenues in the segment declined 5.1% in the first nine months of 2020. With the health peril still very much present, the company's fourth-quarter results may be adversely impacted too.
Meanwhile, Old Dominion's efforts to reduce debt levels are quite encouraging. The company's total debt was around $250 million in 2008. This has been lowered to $99.9 million at the end of third-quarter 2020.
Additionally, the company’s cash and cash equivalents at the end of the third quarter stood at $626 million, way above the current maturities of long-term debt figure of $45 million, implying that the company has sufficient cash to meet its current debt obligations.
Zacks Rank & Stocks to Consider
Old Dominion currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , Landstar System, Inc. (LSTR - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Landstar and Knight-Swift carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1 (Strong 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, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.
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