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April 27, 2022 10:55 AM, EDT

Old Dominion Freight Line Reports Record Revenue for Q1

Old Dominion Freight Line truckOld Dominion Freight Line's revenue increased by 32.9% in the first quarter, to a record $1.5 billion from $1.13 billion in 2021. (Old Dominion Freight Line)

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Old Dominion Freight Line’s revenue reached a record during the first quarter, the company announced April 27.

The Thomasville, N.C.-based less-than-truckload carrier reported revenue increased by 32.9%, to a record $1.5 billion from $1.13 billion. Net income was $299.8 million, or $2.60 a diluted share, for the three months ending March 31. That compared with $199.4 million, $1.70, during the 2021 period.

“The OD team successfully launched another year by delivering first-quarter results that included new company records for both revenue and earnings per diluted share,” ODFL President Greg Gantt said during a call with investors. “We began the year with significant momentum in our business and expected that we would continue to win market share in 2022.

Greg Gantt

Gantt

“This expectation has already become reality as the 32.9% increase in revenue was the fifth straight quarter where we recorded double-digit revenue growth.”;

ODFL attributed the revenue improvement primarily to increases in LTL revenue per hundredweight and LTL tons per day. Revenue per hundredweight grew 17.4% to $28.13 in the recent quarter from $23.96 during the same time last year. LTL tonnage per day increased 12% to 41,454 from 37,010 a year ago. The increase in LTL tons per day included a 13.2% increase in LTL shipments per day that partially was offset by a 1.1% decrease in LTL weight per shipment.

“The improvements in both freight density and yield created operating leverage that allowed us to improve our cost categories as a percent of revenues,” Gantt said. “Density and yield are the key ingredients to long-term improvement in our operating ratio. And both generally require the support of a favorable domestic economy.”

 

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The results exceeded expectations by Wall Street analysts, who had been looking for $2.37 per share and quarterly revenue of $1.45 billion, according to Zacks Consensus Estimate.

ODFL also noted in the report that LTL shipments in Q1 increased by 15% to 3.34 million from 2.9 million in the prior-year quarter. At the same time, revenue per shipment improved 16.1% to $446.86 from $384.76. The average length of haul saw a slight increase of 1.2%, to 939 miles from 928 miles last year.

These results were complemented by an improved operating ratio. This measure shows how efficient a company is at keeping costs low while generating revenue or sales, meaning more-efficient companies have a smaller ratio. ODFL reported that its operating ratio fell to 72.9 from 76.1 year-over-year.

Old Dominion Q1 2022 Earnings Report by Transport Topics on Scribd

“Demand for our superior service has remained consistently strong,” Gantt said. “We do not see that changing in the foreseeable future based on recent conversations with both our customers and our sales team. We continue to receive feedback regarding the general lack of capacity within the LTL industry. This feedback is not unexpected given that the LTL industry has seen a net decrease in the number of service centers over the past 10 years.”

Gantt added that customers also appear to be dealing with lower inventory balances than they would prefer. This can result in missed revenue opportunities for them. He has heard similar stories from suppliers and has seen little improvement with their inventories this year.

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ODFL has opened three new service centers this year as part of an expansion plan that is targeting an additional five to seven new facilities by year-end. The company currently has 15% to 20% excess capacity. It also is working to grow its workforce and fleet. 

“We increased our average number of full-time employees by 18.5% during the first quarter,” Gantt said. “We would like to reduce our reliance on purchased transportation. To accomplish this, however, we will need to increase the capacity of our fleet. While our 2022 capital expenditure plan includes approximately $485 million for equipment, we are experiencing delays with the delivery of new equipment.”

Old Dominion Freight Line ranks No. 10 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

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