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Old Dominion (ODFL) Posts Solid May LTL Unit Performance

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Old Dominion Freight Line, Inc. (ODFL - Free Report) provided an update on the performance of its less-than-truckload (LTL) segment, which is its primary revenue generator, in May.

With 2.3% increase in LTL tons per day and a rise in LTL revenue per hundredweight, ODFL’s revenue per day climbed 26% year over year in May 2022. LTL tons per day benefited from a 2.8% increase in LTL shipments per day. The metric was partly hurt by a 0.6% dip in LTL weight per shipment.

Quarter to date, Old Dominion’s LTL revenue per hundredweight and LTL revenue per hundredweight excluding fuel surcharges jumped 22.4% and 9.6% year over year, respectively.

ODFL’s president and chief executive officer Greg C. Gantt said, “Old Dominion’s revenue growth exceeded 20% for both April and May of 2022, as customer demand has remained steady throughout the second quarter. The consistency in demand for our superior service has allowed us to improve our yields while also supporting our market share initiatives. We believe we can continue to win market share over the long term and, as a result, we remain fully committed to the same long-term strategic plan that has guided us for many years.”

Zacks Rank & Key Picks

Old Dominion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Transportation sector are Ryder System, Inc. (R - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and GATX Corporation (GATX - Free Report) .

Ryder has a trailing-four quarter surprise of 48.2%, on average, with its earnings having surpassed the Zacks Consensus Estimate in all the last four quarters. R is benefiting from improving economic and freight conditions in the United States. Revenues in all segments grew (on higher rental revenues, new business and favorable pricing) in first-quarter 2022.

R currently sports a Zacks Rank #1.

The expected long-term (three-to-five years) earnings per share (EPS) growth rate for C.H. Robinson is pegged at 9%. Improving freight market conditions are aiding CHRW. In first-quarter 2022, the top line improved 41.8% owing to favorable truckload pricing for customers and handsome profits in ocean freight.

Driven by the positives, the stock has rallied 10.8% in the past year.  CHRW currently carries a Zacks Rank #2 (Buy).

GATX has a trailing four-quarter surprise of 40.1%, on average, with its earnings having surpassed the Zacks Consensus Estimate in all the last four quarters. The gradual improvement in the North American railcar leasing market is a huge positive for GATX.

Driven by the upsides, the stock has risen 14.3% in the past year.  GATX currently has a Zacks Rank of 2.