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Less-than-truckload carrier Old Dominion Freight Line reported higher net income and revenue in the second quarter as it achieved, amid lower shipments and tonnage, company records for revenue, operating ratio and earnings per diluted share.
For the period ended June 30, net income rose to $174 million, or $2.16 per diluted share, on revenue of $1.06 billion. That compared with net income of $163.4 million, or $1.99, on revenue of $1.03 billion a year earlier.
Operating ratio (operating expenses as a percent of revenue) improved to 77.9 compared with 78.7 a year earlier.
The combination of revenue growth and improved operating ratio allowed Old Dominion to increase earnings per diluted share by 8.5% for the second quarter.
“We were especially pleased to produce these quarterly financial records during a period with lower LTL shipments and tonnage, which reflects the ongoing softer demand environment,” Old Dominion CEO Greg Gantt said in a company release.
“Maintaining our long-term, consistent approach to pricing may have also contributed to the decrease in our volumes,” he said. “The strength of our yield, however, allowed us to increase our revenue and also contributed to the improvement in our operating ratio. We intend to maintain our disciplined approach to yield management and believe the pricing environment has remained relatively stable.”
The increase in LTL revenue in the second quarter was driven by a 9.5% increase in LTL revenue per hundredweight that partially was offset by a 6.3% decline in LTL tonnage for the quarter. The decrease in LTL tonnage primarily was attributable to a 3.8% decrease in LTL weight per shipment and a 2.6% decrease in LTL shipments. The decrease in LTL weight per shipment was expected and also contributed to the increase in its LTL revenue per hundredweight, according to the Thomasville, N.C.-based company.
“We expect our LTL weight per shipment in the second half of 2019 to be more consistent with the second half of 2018,” Gantt said.
For the six-month period, net income rose to $307.3 million, or $3.80, on revenue of $2.05 billion. In the 2018 period, net income was $272.7 million, or $3.32, on revenue of $1.95 billion.
Old Dominion Freight Line ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.