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Is a Beat in Store for Old Dominion (ODFL) in Q1 Earnings?

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Old Dominion Freight Line (ODFL - Free Report) is scheduled to report first-quarter 2022 results on Apr 27, before market open.

The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised upward by 2.2% in the past 60 days to $2.36.  The company has an impressive earnings history, having outperformed the Zacks Consensus Estimate in all of the past four quarters. It has a trailing four-quarter earnings surprise of 6.5%, 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

 

Gradual recovery in the freight environment is anticipated to have aided Old Dominion’s first-quarter performance. This is expected to be reflected in less than truckload (LTL) revenue per hundredweight. The Zacks Consensus Estimate for first-quarter LTL revenue per hundredweight suggests a rise of 16.2% from the year-ago quarter’s reported. The anticipated improvement in LTL revenue per hundredweight is likely to be reflected in LTL services’ revenues, the company’s major revenue-generating segment. Per the consensus estimate, LTL tonnage per day surged 9.2% from the year-ago quarter’s reported figure.

Improvement in operating ratio (operating expenses, as a percentage of revenues) is likely to get reflected in the first-quarter bottom line (driven by higher revenues).  The Zacks Consensus Estimate for the operating ratio is pegged at 75% for the quarter to be reported, indicating an improvement from 76% reported in first-quarter 2021. Lower the value of this key measure of efficiency, the better.

Higher operating expenses (due to a rise in costs pertaining to salaries, wages and benefits and an escalation in operating supplies and expenses) and high capital expenditures are likely to have hurt the company’s bottom line.

What Does the Zacks Model Say?

Our proven model conclusively predicts 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, which is exactly 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 +0.12% as the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at $2.36. 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, currently.

Highlights of Q4 Earnings

Old Dominion Freight Line’s earnings per share of $2.41 outpaced the Zacks Consensus Estimate by 17 cents. The bottom line surged 49.7% year over year. Revenues of $1410.4 million also surpassed the Zacks Consensus Estimate of $1,372.5 million and increased 31.4% year over year.

Other Stocks to Consider

Investors interested in the broader Transportation sector can also consider stocks like United Parcel Service (UPS - Free Report) , Southwest Airlines Co. (LUV - Free Report) and American Airlines Group (AAL - Free Report) , as these stocks also possess the right combination of elements to beat estimates this reporting cycle.  

UPS has an Earnings ESP of +1.92% and is a Zacks #3 Ranked stock at present. UPS will release first-quarter 2022 results on Apr 26.

Strong package delivery demand is expected to have aided UPS’ first-quarter 2022 performance. Higher revenue per piece is likely to get reflected in U.S. Domestic Package revenues.

Southwest Airlines has an Earnings ESP of +28.09% and is currently a #3 Ranked player. LUV will release first-quarter 2022 results on Apr 28.

Southwest Airlines expects first-quarter 2022 operating revenues to decline 8-10% from the first quarter of 2019. The company expects to incur a loss in the period.

American Airlines has an Earnings ESP of +3.01% and is a Zacks #3 Ranked stock at present. AAL will release first-quarter 2022 results on Apr 21.

With air-travel demand steadily rebounding, AAL’s passenger revenues are expected to reflect a significant year-over-year increase. The anticipated increase in passenger revenues is likely to have driven the company’s top line in the first quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.