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July 28, 2016 1:00 PM, EDT

Old Dominion Freight Line Posts Weaker 2Q Earnings

Old Dominion Freight Line

Old Dominion Freight Line posted weaker earnings in the second quarter with profits falling 5% year-over-year after decreases in less-than-truckload tonnage, pounds per shipment and fuel surcharges.

The company reports net income was $81.4 million, down from $85.6 million during the same period last year. Earnings per share fell to 98 cents from $1.00 year-over-year.

Revenue fell 1% to $755.4 million, while expenses had almost no change.

Old Dominion ranks No. 11 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.

"Our quarterly revenue was once again negatively impacted by reductions in both fuel surcharges and non-LTL revenue,” said David Congdon, vice chairman and CEO of Old Dominion. “These factors, combined with a domestic economy that remained sluggish, resulted in our first quarterly year-over-year decline in revenue since the fourth quarter of 2009."

Less-than-truckload pricing remained relatively stable, according to ODFL, echoing a similar sentiment from Echo Global Logistics on July 27.  Revenue per 100 pounds was up 15 cents to $18.37.  Total number of LTL shipments in the quarter increase to 2.6 million shipments, while intercity travel miles increased 1.6% to 145.7 million for the quarter.

“We still feel good about the pricing environment. We’re still getting contractual renewals at the same rate as compared to earlier in the year,” Adam Satterfield, Chief Financial Officer, said on a conference call with analysts.

Overall LTL revenue dropped slightly due to a 1% decrease in total pounds per shipment and a 0.3% decrease in total tonnage year-over-year. Nevertheless, total tonnage per day improved 5.3% compared to the first-quarter.

“We are encouraged by the sequential increase in tons per day for May and June that were pretty much in line with averages in years when Good Friday was in the first quarter,” said Satterfield. “In addition, the sequential trend for July is in line with our ten year average, which is a 2.4% decrease in LTL tons per day as compared to June.”

Earnings were 3 cents higher than the consensus from analysts.

The operating ratio increased 80 basis-points to 82.3.