Back to top

Image: Shutterstock

What's in Store for Old Dominion (ODFL) in Q1 Earnings?

Read MoreHide Full Article

Old Dominion Freight Line (ODFL - Free Report) is scheduled to report first-quarter 2021 results on Apr 22, before market open.

The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised downward by 1.3% in the past 30 days. However, the company has an impressive earnings history, having outperformed the Zacks Consensus Estimate in all the past four quarters. It has a trailing four-quarter earnings surprise of 9.3%, on average.

Let’s see how things are shaping up for this earnings season.

Old Dominion Freight Line, Inc. Price and EPS Surprise

 

Old Dominion Freight Line, Inc. Price and EPS Surprise

Old Dominion Freight Line, Inc. price-eps-surprise | Old Dominion Freight Line, Inc. Quote

 

Factors to Note

Gradual recovery in the freight environment is anticipated to have aided Old Dominion’s first-quarter performance. This is expected to get reflected in less than truckload (LTL) revenue per hundredweight. Notably, the Zacks Consensus Estimate for LTL revenue per hundredweight in the first quarter suggests a rise of 2.1% from the year-ago period’s reported number and a marginal improvement from fourth-quarter 2020’s reported figure. The anticipated improvement in LTL revenue per hundredweight is likely to get reflected in revenues from LTL services, the company’s major revenue-generating segment.

Old Dominion’s bottom line is expected to have benefited from an anticipated reduction in operating expenses owing to decline in salaries, wages and benefits expenses, as was the case in the last reported quarter. The apprehended decline in operating expenses will likely get reflected in the operating ratio (operating expenses as a percentage of revenues). The Zacks Consensus Estimate for operating ratio stands at 77% for the quarter to be reported, indicating an improvement from 81% reported in the first quarter of 2020. Lower the value of this key measure of efficiency, the better.

In spite of an improvement, freight demand is still weak as coronavirus-led disruptions continue.  High capital expenditures are also likely to have hurt the company’s financials.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Old Dominion this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Old Dominion has an Earnings ESP of -1.22% as the Most Accurate Estimate is pegged at $1.56, lower than the Zacks Consensus Estimate of $1.58. 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.

Highlights of Q4 Earnings

Old Dominion Freight Line’s earnings per share of $1.61 outpaced the Zacks Consensus Estimate of $1.57. Moreover, the bottom line surged 34.2% year over year. This upside was driven by a record improvement in the operating ratio on the back of the company’s cost-containment efforts. Revenues of $1073.4 million surpassed the Zacks Consensus Estimate of $1039.9 million and increased 6.4% year over year on a 4.9% rise in LTL tons.

Stocks to Consider

Investors interested in the broader Transportation sector may consider JetBlue Airways Corporation (JBLU - Free Report) , Herc Holdings Inc. (HRI - Free Report) and Landstar System, Inc. (LSTR - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Landstar has an Earnings ESP of +0.79% and is Zacks #2 Ranked, presently. The company will release first-quarter 2021 results on Apr 21.

Herc Holdings has an Earnings ESP of +18.8% and sports a Zacks Rank of 1, at present. The company will release first-quarter 2021 results on Apr 22.

JetBlue Airways has an Earnings ESP of +3.09 and carries a Zacks Rank #3. The company is set to release first-quarter 2021 earnings numbers on Apr 27.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>

Published in