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Old Dominion (ODFL) Gears Up for Q2 Earnings: What's in Store?

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Old Dominion Freight Line (ODFL - Free Report) is scheduled to report second-quarter 2024 results on Jul 24, before market open.

The company has an impressive earnings surprise history. ODFL’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 2.8%.

The Zacks Consensus Estimate for second-quarter 2024 earnings has been revised 1.4% downward in the past 60 days. The estimate is currently pegged at $1.45 per share. Additionally, the consensus mark implies a 9% increase from the year-ago actuals. The Zacks Consensus Estimate for second-quarter 2024 revenues is currently pegged at $1.5 billion, indicating a 6.1% uptick from the year-ago actuals.

Given this backdrop, let’s examine the factors likely to have influenced Old Dominion’s performance in the to-be-reported quarter.

We expect the company’s performance to have been hurt by soft revenues due to weak freight demand. The bulk of revenues is generated by the Less-Than-Truckload (“LTL”) Service unit. We predict revenues from LTL Services to be roughly flat from first-quarter 2024 actuals.

On the flip side, lower expenses led by the company’s cost-control initiatives are likely to have aided the bottom-line performance. Low costs are expected to have resulted in an improvement in the operating ratio (operating expenses as a percentage of total revenues). Our estimate for this key metric is currently pegged at 71.9% compared with 72.3% reported in the prior-year quarter. A lower value of this metric is preferable.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Old Dominion this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ODFL has an Earnings ESP of +0.03% and a Zacks Rank #4 (Sell), at present.

Q1 Highlights

Old Dominion’s first-quarter 2024 earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.33 and increased 3.9% year over year. Management stated that all per-share data, even for the prior-year period, have been adjusted to reflect the two-for-one stock split. The stock split was announced by ODFL in the first quarter. Revenues of $1.46 billion missed the Zacks Consensus Estimate of $1.47 billion but inched up 1.2% year over year.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat their second-quarter 2024 earnings.

Copa Holdings (CPA - Free Report) has an Earnings ESP of +3.01% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CPA will release results on Aug 7. Upbeat air-travel demand is likely to have aided the second-quarter performance.

The Zacks Consensus Estimate for CPA’s second-quarter 2024 earnings has been revised downward by 14.9% in the past 60 days to $2.98 per share. CPA has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 20.19%.

Expeditors International of Washington (EXPD - Free Report) currently has an Earnings ESP of +0.69% and a Zacks Rank #2. EXPD is scheduled to report second-quarter 2024 earnings on Aug 6. Lackluster volumes (with respect to air-freight tonnage and ocean containers) due to weakening demand and falling rates are likely to have hurt EXPD’s performance in the to-be-reported quarter.

The Zacks Consensus Estimate for second-quarter earnings has been revised 2.5% upward over the last 60 days. EXPD surpassed the Zacks Consensus Estimate for earnings in only one of the preceding four quarters and missed thrice, the average negative earnings surprise being 3.44%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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