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Old Dominion's (ODFL) Q2 Earnings Beat Estimates, Increase Y/Y

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Old Dominion Freight Line’s (ODFL - Free Report) second-quarter 2021 earnings per share of $2.31 outpaced the Zacks Consensus Estimate by 14 cents. Moreover, the bottom line surged 84.8% year over year. The upside was driven by a vast improvement in the operating ratio (operating expenses, as a percentage of revenues) on the back of higher revenues.

Revenues of $1319.4 million also surpassed the Zacks Consensus Estimate of $1,240.8 million and increased 47.2% year over year as well, led by an 28.1% increase in LTL (Less-Than-Truckload) tons and a 14.9% uptick in LTL revenue per hundredweight.

Other Details

In the quarter under review, LTL weight per shipment fell 4%, while LTL revenue per shipment rose 10.3%. Both LTL shipments and LTL shipments per day were up 33.5% year over year.

Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise


Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise

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


The company’s major revenue-generating segment LTL services logged a total of $1,299.8 million, up 47% year over year. Revenues from other services rallied 61.8% to $19.6 million.

Total operating expenses rose 36.8% to $953.4 million, mainly due to the 32.7% rise in costs pertaining to salaries, wages & benefits and 82.5% escalation in operating supplies & expenses.

Moreover, the operating ratio improved 550 basis points to 72.3%. Notably, lower the value of this metric, the better.

Old Dominion exited the quarter with cash and cash equivalents worth $484.2 million compared with $401.43 million at the end of 2020. Capital expenditures incurred in the reported quarter were $155.1 million. Old Dominion expects a capex of $605 million for 2021 (in-line with its previous expectation). Of the total, $275 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $290 million and $40 million on tractors/trailers and information technology and other assets, respectively.

During the second quarter, Old Dominion, currently carrying a Zacks Rank #2 (Buy), rewarded its shareholders with $63.2 million of capital. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

New Buyback Program

The company’s board of directors approved a new share buyback program that authorizes Old Dominion to repurchase up to $2 billion of its outstanding stock. This new repurchase program will begin after the completion of the company’s existing $700-million repurchase program, of which $206.3 million was available and uncommitted at Jun 30, 2021. The new share repurchase program does not have an expiration date.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern (KSU - Free Report) recently reported second-quarter 2021 results.

Delta, carrying a Zacks Rank #3 (Hold), incurred a loss (excluding $2.09 from non-recurring items) of $1.07 per share. The figure was narrower than the Zacks Consensus Estimate of a loss of $1.41. Revenues of $7,126 million were substantially higher than the year-ago quarter’s levels, buoyed by the recent uptick in air-travel demand. The metric also topped the Zacks Consensus Estimate of $6,340.9 million.

Kansas City Southern, carrying a Zacks Rank of 4(Sell), reported second-quarter 2021 earnings (excluding $6.23 from non-recurring items) of $2.06 per share missed the Zacks Consensus Estimate of $2.16. Quarterly revenues of $749.5 million surpassed the Zacks Consensus Estimate of $733.1 million and increased 36.8% year over year, driven by 31% rise in overall carload volumes.

J.B. Hunt, a Zacks #3-Ranked player, reported better-than-expected second-quarter 2021 results. Quarterly earnings of $1.61 per share surpassed the Zacks Consensus Estimate of $1.55. Total operating revenues of $2908.4 million outperformed the Zacks Consensus Estimate of $2722 million and also jumped 35.5% year over year.