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Old Dominion (ODFL) Beats on Q4 Earnings, Hikes Dividend

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Old Dominion Freight Line’s (ODFL - Free Report) fourth-quarter 2019 earnings per share of $1.80 beat the Zacks Consensus Estimate by 2 cents. However, the bottom line declined 7.7% year over mainly due to higher operating expenses.

Revenues came in at $1,009.2 million, edging past the Zacks Consensus Estimate of $1,002.1 million. However, the top line fell 1.7% on a year-over-year basis mainly due to a decline in LTL (Less-Than-Truckload) tonnage as a result of a soft freight environment.

However, this Zacks Rank #4 (Sell) company announced a 35.3% hike in quarterly dividend to 23 cents per share (annualized 92 cents). The first installment of the new dividend will be paid on March 18, to shareholders of record as of Mar 4, 2020.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Other Details

In the quarter under review, Old Dominion reported a 4.5% decline in LTL tonnage. The major revenue generating segment — LTL services — logged a total of $996.6 million, down 1.4% year over year.

However, LTL revenue per hundredweight was up 2.7% in the final quarter of 2019. The metric increased 4%, excluding fuel surcharges. However, LTL shipments declined 4.1%. Also, LTL weight per shipment fell marginally. Total operating expenses increased 1.6% to $820.9 million. Operating expenses increased mainly due to a 3.6% rise in costs on salaries, wages & benefits.

With expenses increasing and revenues decreasing, another key metric — operating ratio (operating expenses as a percentage of revenues) —deteriorated to 81.3% in the fourth quarter of 2019 from 78.7% in the year-ago quarter. Notably, lower the value the better.

Old Dominion exited the 2019 with cash and cash equivalents of $403.57 million compared with $190.28 million at the end of 2018. Capital expenditures at the end of the fourth quarter was $109 million. During the final quarter of 2019, Old Dominion rewarded its shareholders to the tune of $49.2 million.

During 2019, the company incurred capital expenditures to the tune of $479.3 million. Old Dominion expects capital expenditures of $315 million in 2020. Of the total amount, $245 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million toward tractors and trailers and technology and other assets, respectively.

During the final quarter of 2019, Old Dominion rewarded its shareholders to the tune of $49.2 million. During 2019, the company rewarded its shareholders to the tune of $295.5 million through dividend payments ($54.6 million) and share buybacks ($241 million).

Upcoming Releases

Investors interested in the broader Transportation sector are awaiting fourth-quarter 2019 earnings reports from key players like Copa Holdings (CPA - Free Report) , Expeditors International of Washington (EXPD - Free Report) and Hertz Global Holdings (HTZ - Free Report) .

Copa Holdings and Expeditors will announce results on Feb 12 and Feb 18, respectively. Hertz will release fourth-quarter earnings numbers on Feb 24.

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