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The company has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 5.28%.
Given this backdrop, let’s check out the factors that might have influenced Old Dominion’s performance in the quarter under review.
We expect Old Dominion’s performance to have been hurt by soft revenues due to weak freight demand. The Zacks Consensus Estimate for quarterly revenues is currently pegged at $1.45 billion, reflecting a 13.3% decline from second-quarter 2022 actuals.
Bulk of the revenues are generated by the Less-Than-Truckload or LTL Service unit. Our estimate for segmental revenues indicates a 13.3% decline from second-quarter 2022 levels. We expect revenues from other sources to be down 19.1% from the the second-quarter 2022 actuals.
On the flip side, lower expenses led by the company’s cost-control initiatives are likely to have aided the bottom-line performance. Due to cost-control exercises, our estimate for salaries, wages and benefits represents a 10% decrease from the prior-year quarter’s levels. Our estimate for operating expenses indicates an 8.2% decrease from second-quarter 2022 actuals.
Despite lower expenses, the top-line weakness, as a result of lackluster freight-demand scenario, is likely to have led to a deterioration in operating ratio (operating expenses as a percentage of revenues). Our estimate for this key metric is currently pegged at 73.5% compared with 69.5% reported in second-quarter 2022. A lower value of this metric is preferable.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for ODFL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Old Dominion has an Earnings ESP of -1.33% and a Zacks Rank #3.
Highlights of Q1
ODFL's first-quarter 2023 earnings per share of $2.58 fell short of the Zacks Consensus Estimate of $2.69 and declined 0.8% year over year. Revenues of $1,442.1 million lagged the Zacks Consensus Estimate of $1,488.5 million and decreased 3.7% year over year. The downside was due to lackluster LTL revenues. The LTL services unit logged a total revenues of $1,424.37 million, down 3.5% year over year. Revenues from other services fell 17.4% to $17.76 million.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their second-quarter 2023 earnings.
American Airlines (AAL - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #3. AAL will release results on Jul 20.
AAL delivered a trailing four-quarter earnings surprise of 12.9%, on average. The Zacks Consensus Estimate for AAL’s second-quarter 2023 earnings suggests a surge of more than 100% from the year-ago reported figure.
JBLU has an expected earnings growth rate of 192.5% for the current year. The company has surpassed the Zacks Consensus Estimate in two of the past four quarters, missing twice.
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Old Dominion (ODFL) Gears up for Q2 Earnings: What's in Store?
Old Dominion Freight Line (ODFL - Free Report) is scheduled to report second-quarter 2023 results on Jul 26, before market open.
The company has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 5.28%.
Given this backdrop, let’s check out the factors that might have influenced Old Dominion’s performance in the quarter under review.
We expect Old Dominion’s performance to have been hurt by soft revenues due to weak freight demand. The Zacks Consensus Estimate for quarterly revenues is currently pegged at $1.45 billion, reflecting a 13.3% decline from second-quarter 2022 actuals.
Bulk of the revenues are generated by the Less-Than-Truckload or LTL Service unit. Our estimate for segmental revenues indicates a 13.3% decline from second-quarter 2022 levels. We expect revenues from other sources to be down 19.1% from the the second-quarter 2022 actuals.
On the flip side, lower expenses led by the company’s cost-control initiatives are likely to have aided the bottom-line performance. Due to cost-control exercises, our estimate for salaries, wages and benefits represents a 10% decrease from the prior-year quarter’s levels. Our estimate for operating expenses indicates an 8.2% decrease from second-quarter 2022 actuals.
Despite lower expenses, the top-line weakness, as a result of lackluster freight-demand scenario, is likely to have led to a deterioration in operating ratio (operating expenses as a percentage of revenues). Our estimate for this key metric is currently pegged at 73.5% compared with 69.5% reported in second-quarter 2022. A lower value of this metric is preferable.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for ODFL this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Old Dominion has an Earnings ESP of -1.33% and a Zacks Rank #3.
Highlights of Q1
ODFL's first-quarter 2023 earnings per share of $2.58 fell short of the Zacks Consensus Estimate of $2.69 and declined 0.8% year over year. Revenues of $1,442.1 million lagged the Zacks Consensus Estimate of $1,488.5 million and decreased 3.7% year over year. The downside was due to lackluster LTL revenues. The LTL services unit logged a total revenues of $1,424.37 million, down 3.5% year over year. Revenues from other services fell 17.4% to $17.76 million.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on their second-quarter 2023 earnings.
American Airlines (AAL - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank #3. AAL will release results on Jul 20.
AAL delivered a trailing four-quarter earnings surprise of 12.9%, on average. The Zacks Consensus Estimate for AAL’s second-quarter 2023 earnings suggests a surge of more than 100% from the year-ago reported figure.
JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #2. JBLU will release results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
JBLU has an expected earnings growth rate of 192.5% for the current year. The company has surpassed the Zacks Consensus Estimate in two of the past four quarters, missing twice.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.