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Old Dominion (ODFL) Up 12.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Old Dominion Freight Line (ODFL - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Old Dominion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Revenue Miss at Old Dominion in Q1
Old Dominion Freight Line’s earnings per share of $1.11 matched the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.8% year over year, mainly owing to lower operating expenses.
Revenues came in at $987.4 million, falling short of the Zacks Consensus Estimate of $989.8 million. The top line also dipped marginally on a year-over-year basis, mainly due to a 3.9% decrease in LTL (Less-Than-Truckload) tons per day as a result of a soft freight environment. Moreover, demand for the company’s services dwindled in the latter half of March as the coronavirus pandemic crippled the domestic economy.
Other Details
In the quarter under review, Old Dominion reported a 2.4% contraction in LTL tonnage. However, LTL revenue per hundredweight was up 2.6% in the first quarter of 2020. The metric increased 3.3% excluding fuel surcharges. Also, LTL weight per shipment rose1.3%. However, LTL shipments was down 3.6%.
The company’s major revenue generating segment, LTL services, logged a total of $974.4 million, slipping 0.2% year over year. Revenues from other services fell 9% to $12.9 million.Total operating expenses decreased in excess of 1% to $804.2 million despite a rise in costs on salaries, wages & benefits.
Despite the revenue deterioration, operating ratio (operating expenses as a percentage of revenues) improved to 81.4% in the first quarter of 2020 from 82% in the year-ago quarter. Notably, lower the value of this metric the better.
Old Dominion exited the quarter with cash and cash equivalents worth $357 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in thereported quarter were $52.2 million. Due to some projects being deferred on account of sluggish shipments, the company reduced its estimated expenditures for real estate during the March quarter by approximately $50 million.
As a result, Old Dominion now expects capital expenditures of $265 million for 2020 ($315 million expected earlier). Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the first quarter, Old Dominion rewarded its shareholders with $196.6 million through buybacks ($178.3 million) and dividends ($18.3 million).
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Old Dominion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Old Dominion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Old Dominion (ODFL) Up 12.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Old Dominion Freight Line (ODFL - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Old Dominion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Revenue Miss at Old Dominion in Q1
Old Dominion Freight Line’s earnings per share of $1.11 matched the Zacks Consensus Estimate. Meanwhile, the bottom line inched up 1.8% year over year, mainly owing to lower operating expenses.
Revenues came in at $987.4 million, falling short of the Zacks Consensus Estimate of $989.8 million. The top line also dipped marginally on a year-over-year basis, mainly due to a 3.9% decrease in LTL (Less-Than-Truckload) tons per day as a result of a soft freight environment. Moreover, demand for the company’s services dwindled in the latter half of March as the coronavirus pandemic crippled the domestic economy.
Other Details
In the quarter under review, Old Dominion reported a 2.4% contraction in LTL tonnage. However, LTL revenue per hundredweight was up 2.6% in the first quarter of 2020. The metric increased 3.3% excluding fuel surcharges. Also, LTL weight per shipment rose1.3%. However, LTL shipments was down 3.6%.
The company’s major revenue generating segment, LTL services, logged a total of $974.4 million, slipping 0.2% year over year. Revenues from other services fell 9% to $12.9 million.Total operating expenses decreased in excess of 1% to $804.2 million despite a rise in costs on salaries, wages & benefits.
Despite the revenue deterioration, operating ratio (operating expenses as a percentage of revenues) improved to 81.4% in the first quarter of 2020 from 82% in the year-ago quarter. Notably, lower the value of this metric the better.
Old Dominion exited the quarter with cash and cash equivalents worth $357 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in thereported quarter were $52.2 million. Due to some projects being deferred on account of sluggish shipments, the company reduced its estimated expenditures for real estate during the March quarter by approximately $50 million.
As a result, Old Dominion now expects capital expenditures of $265 million for 2020 ($315 million expected earlier). Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.
During the first quarter, Old Dominion rewarded its shareholders with $196.6 million through buybacks ($178.3 million) and dividends ($18.3 million).
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Old Dominion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Old Dominion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.