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Old Dominion's (ODFL) Q1 Earnings In Line, Revenues Lag
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Old Dominion Freight Line’s (ODFL - Free Report) first-quarter 2020 earnings per share of $1.11 matched the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.8% year over year, mainly owing to lower operating expenses.
Revenues came in at $987.4 million, falling short of the Zacks Consensus Estimate of $989.8 million. The top line also dipped marginally on a year-over-year basis, mainly due to a 3.9% decrease in LTL (Less-Than-Truckload) tons per day as a result of a soft freight environment. Moreover, demand for the company’s services dwindled in the latter half of March as the coronavirus pandemic crippled the domestic economy.
Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise
In the quarter under review, Old Dominion reported a 2.4% contraction in LTL tonnage. However, LTL revenue per hundredweight was up 2.6% in the first quarter of 2020. The metric increased 3.3% excluding fuel surcharges. Also, LTL weight per shipment rose1.3%. However, LTL shipments was down 3.6%.
The company’s major revenue generating segment, LTL services, logged a total of $974.4 million, slipping 0.2% year over year. Revenues from other services fell 9% to $12.9 million.Total operating expenses decreased in excess of 1% to $804.2 million despite a rise in costs on salaries, wages & benefits.
Despite the revenue deterioration, operating ratio (operating expenses as a percentage of revenues) improved to 81.4% in the first quarter of 2020 from 82% in the year-ago quarter. Notably, lower the value of this metric the better.
Old Dominion exited the quarter with cash and cash equivalents worth $357 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in thereported quarter were $52.2 million. Due to some projects being deferred on account of sluggish shipments, the company reduced its estimated expenditures for real estate during the March quarter by approximately $50 million.
As a result, Old Dominion now expects capital expenditures of $265 million for 2020 ($315 million expected earlier). Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the first quarter, Old Dominion rewarded its shareholders with $196.6 million through buybacks ($178.3 million) and dividends ($18.3 million).
Investors interested in the broader Transportation sector await first-quarter 2020 earnings reports from companies like Triton International Ltd. , Canadian National Railway Co. (CNI - Free Report) and Air Lease (AL - Free Report) .
Triton and Canadian National will release first-quarter earnings on Apr 24 and Apr 27, respectively, while Air Lease will report earnings for the first quarter on May 7.
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Old Dominion's (ODFL) Q1 Earnings In Line, Revenues Lag
Old Dominion Freight Line’s (ODFL - Free Report) first-quarter 2020 earnings per share of $1.11 matched the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.8% year over year, mainly owing to lower operating expenses.
Revenues came in at $987.4 million, falling short of the Zacks Consensus Estimate of $989.8 million. The top line also dipped marginally on a year-over-year basis, mainly due to a 3.9% decrease in LTL (Less-Than-Truckload) tons per day as a result of a soft freight environment. Moreover, demand for the company’s services dwindled in the latter half of March as the coronavirus pandemic crippled the domestic economy.
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
Other Details
In the quarter under review, Old Dominion reported a 2.4% contraction in LTL tonnage. However, LTL revenue per hundredweight was up 2.6% in the first quarter of 2020. The metric increased 3.3% excluding fuel surcharges. Also, LTL weight per shipment rose1.3%. However, LTL shipments was down 3.6%.
The company’s major revenue generating segment, LTL services, logged a total of $974.4 million, slipping 0.2% year over year. Revenues from other services fell 9% to $12.9 million.Total operating expenses decreased in excess of 1% to $804.2 million despite a rise in costs on salaries, wages & benefits.
Despite the revenue deterioration, operating ratio (operating expenses as a percentage of revenues) improved to 81.4% in the first quarter of 2020 from 82% in the year-ago quarter. Notably, lower the value of this metric the better.
Old Dominion exited the quarter with cash and cash equivalents worth $357 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in thereported quarter were $52.2 million. Due to some projects being deferred on account of sluggish shipments, the company reduced its estimated expenditures for real estate during the March quarter by approximately $50 million.
As a result, Old Dominion now expects capital expenditures of $265 million for 2020 ($315 million expected earlier). Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the first quarter, Old Dominion rewarded its shareholders with $196.6 million through buybacks ($178.3 million) and dividends ($18.3 million).
Zacks Rank & Upcoming Releases
Old Dominion carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Transportation sector await first-quarter 2020 earnings reports from companies like Triton International Ltd. , Canadian National Railway Co. (CNI - Free Report) and Air Lease (AL - Free Report) .
Triton and Canadian National will release first-quarter earnings on Apr 24 and Apr 27, respectively, while Air Lease will report earnings for the first quarter on May 7.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>