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Old Dominion Freight Line Inc.’s profit and revenue fell in the second quarter as freight demand dropped because of the COVID-19 pandemic recession.
The Thomasville, N.C.-based less-than-truckoad carrier said net income fell 15.1% to $147.8 million from $174.1 million in the same quarter a year earlier. Diluted earnings per share decreased to $1.25 from $1.44.
Revenue declined at a similar rate, falling 15.5% to $896.2 million from $1.1 billion in the same period a year earlier.
“The second quarter of 2020 was one of the most difficult periods I’ve experienced in my career,” CEO Greg Gantt said in a July 30 conference call with industry analysts.
The company’s tons per day volume fell 12.1% in the quarter. It suffered a 3.8% decrease in less-than-truckload revenue per hundredweight.
Old Dominion’s financial performance mirrored the experience of most motor carriers during the quarter.
“As these stay-at-home mandates were phased out and our customers began to reopen their businesses, our revenue trend improved on a sequential basis for the remaining months of the quarter,” Gantt said.
That trend has continued into July, he said.
“Although year-over-year volumes decreased for both May and June when compared to the same periods of 2019, we were encouraged by the sequential improvement in our volumes that has also continued into July,” Gantt said.
Through most of July, Old Dominion’s revenue per day had recovered and was down only 3% from the same month in the prior year.
The motor carrier’s financial performance was helped by cost-cutting measures, including furloughs. That will carry into the third quarter, Gantt said.
“We’ve figured out ways to be able to do more with less,” he said.
Although it has brought some furloughed workers back, Old Dominion ended the second quarter down about 1,400 positions, or 7% from the end of the first quarter.
Gantt said he saw encouraging business developments during the quarter. At the outset, Old Dominion lost business to competitors that were aggressive in their pricing. But it has started to recover that business without having to lower its pricing or service standards, Gantt said.
He added that the customers who left were disappointed with the service they received and came back to Old Dominion, which posted a record low claims ratio of 0.1% and on-time deliveries of 99%.
“[The service] gap between us and our competition has widened during the current environment,” he said.
Gantt noted that the company’s liquidity remained strong. It ended the quarter with $518.6 million in cash and cash equivalents.
Old Dominion Freight Line ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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