Old Dominion Freight Line’s third-quarter results were slightly ahead of analysts’ expectations, but many of its operating metrics continued to “reflect ongoing softness in the domestic economy.” The comparisons to the prior-year period, which benefited from Yellow Corp.’s (OTC: YELLQ) shutdown, were also tougher.
The Thomasville, North Carolina-based less-than-truckload carrier reported earnings per share of $1.43, which was one cent ahead of the consensus estimate but 11 cents lower year over year.
Revenue of $1.47 billion fell 3% y/y as a 4.8% decline in tonnage per day was partially offset by a 1.5% increase in revenue per hundredweight, or yield. The tonnage decline was the result of a 3.4% decline in daily shipments and a 1.4% dip in weight per shipment. (Tonnage was 3.2% lower than the second quarter as shipments and weight per shipment fell 1% and 2.2%, respectively.)
Excluding fuel surcharges, yield was 4.6% higher y/y (2.8% higher sequentially), benefitting partially from the lower shipment weights.
Old Dominion (NASDAQ: ODFL) recorded a 72.7% operating ratio (operating expenses expressed as a percentage of revenue), which was 210 basis points worse y/y and 80 bps worse than the second quarter.
Salaries, wages and benefits (as a percentage of revenue) were 250 bps higher y/y. The carrier saw shipments per employee fall a little more than 4% y/y. (Headcount was up nearly 1% y/y compared to the more than 3% decline in shipments.) A 1.7% increase in cost per shipment outpaced a 0.1% increase in revenue per shipment.
“The challenging operating environment, and strong comparable results for the third quarter of 2023, resulted in the first year-over-year decrease in our quarterly revenue and earnings per diluted share this year, President and CEO Marty Freeman, said in a Wednesday news release.
Shares of ODFL were off 5.8% in pre-market trading on Wednesday.
Old Dominion will host a call to discuss third-quarter results at 10 a.m. EDT on Wednesday.
