Old Dominion's (ODFL) Q3 Earnings Surpass Estimates, Up Y/Y

Old Dominion Freight Line’s ODFL third-quarter 2021 earnings per share of $2.47 outpaced the Zacks Consensus Estimate by 10 cents. The bottom line surged 44.4% year over year. The upside was driven by improvement in the operating ratio (operating expenses, as a percentage of revenues) on the back of higher revenues.

Revenues of $1400 million also surpassed the Zacks Consensus Estimate of $1,360.3 million and increased 32.3% year over year. The uptick was backed by a 13.7% increase in LTL (Less-Than-Truckload) tons and a 15.7% rise in LTL revenue per hundredweight.

Old Dominion Freight Line, Inc. Price, Consensus and EPS Surprise

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, LTL weight per shipment fell 4.8%, while LTL revenue per shipment rose 10.2%. Both LTL shipments and LTL shipments per day were up 19.4% year over year.

The company’s major revenue-generating segment LTL services logged a total of $1,378.3 million, up 31.9% year over year. Revenues from other services rallied 60.5% to $21.7 million.

Total operating expenses moved up 29% to $1,016.6 million, mainly due to a 23.8% rise in costs pertaining to salaries, wages & benefits, 62.2% increase in operating supplies and expenses as well as a more than 100% surge in purchased transportation costs.

The operating ratio improved 190 basis points to 72.6%. Lower the value of this metric, the better.

Old Dominion exited the quarter with cash and cash equivalents worth $339.8 million compared with $401.43 million at the end of 2020. Capital expenditures incurred in the reported quarter were $178.6 million. Old Dominion expects a capex of $565 million for 2021 (previous expectation: $605 million). Of the total, $235 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $290 million and $40 million on tractors/trailers and information technology and other assets, respectively.

During the third quarter, Old Dominion — carrying a Zacks Rank #2 (Buy) — rewarded its shareholders through dividend and share repurchase programs, including a $250-million accelerated share repurchase agreement that will expire no later than March 2022. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported third-quarter 2021 results.

Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat the Zacks Consensus Estimate of $8,370.6 million.

J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million surpassed the Zacks Consensus Estimate of $725.9 million.

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