If trucks are shipping stuff across the country, then that usually means good things for the economy in general. So today’s second-quarter report from Old Dominion Freight Line, Inc. (ODFL) should be an encouraging sign for a struggling economy that’s looking for reassurances this earnings season.
ODFL reported earnings per share and revenue that easily advanced upon year-ago levels. Furthermore, profit was better than expected for a third straight quarter.
Transport stocks have overall been doing rather well this earnings season. Take a look at our in-depth report on the industry here: Rail & Trucking on the Move.
Another positive can be seen on the Zacks #1 Rank List. Old Dominion Freight Line is one of four companies from the transportation-truck industry on that list, which means ODFL isn’t the only name in the space that has an upward trajectory in earnings estimates. The other 3 companies are Covenant Transportation Group, Inc. (CVTI), Forward Air Corporation (FWRD) and Patriot Transportation Holding, Inc. (PATR).
Old Dominion Freight Line was the top-performing Zacks #1 Rank stock on Wednesday. Shares of the company gained approximately 5.8%, and its volume surged to more than 1.4 million shares, compared to the daily average of only around 238,000.
ODFL is an inter-regional and multi-regional motor carrier transporting primarily less-than-truckload shipments of general commodities, including consumer goods, textiles and capital goods to a diversified customer base.
Second Quarter Report
Old Dominion Freight Line reported second-quarter earnings of 58 cents per share, compared to 29 cents in the year-earlier period. The result was also nearly 30% better than the Zacks Consensus Estimate at 45 cents.
This marked the third straight quarter with a positive surprise, and was also the biggest of those three beats.
Revenue advanced 16.5% to $368.3 million from $316.2 million in last year’s second quarter. According to the company, this increase was driven by a 13.4% advance in tonnage; its first double-digit increase in that regard in two years.
If there was a negative in the quarter, it was that Old Dominion Freight Line is staying pretty cautious about the future. In fact, it echoed a sentiment that many companies are feeling right now when it stated: “We remain uncertain about the strength and sustainability of the economic recovery…”.
In addition to the economic recovery, ODFL said it is also uncertain about the potential impact of regulatory changes on healthcare, energy, labor and taxes, among other issues. Nevertheless, the company is encouraged by the operating trends that were on display in the second quarter and believes it is well-positioned to continue to benefit from the improving economic environment.
ODFL expects tonnage to increase by 15% to 20% year over year in the third quarter. At the moment, the Zacks Consensus Estimate for the third quarter is 46 cents, compared to 28 cents in the previous year.
Earnings Estimates for Old Dominion Freight Line
Earnings estimates for ODFL will probably see some movement in the coming days. Leading up to this report, though, there had been no movement in the 15 estimates for this year and 16 estimates for next year over the past 30 days. However, looking further back, we can see that the trend is to the upside (see chart above).
The Zacks Consensus Estimate for this year is $1.53 per share, which is up 2% from two months ago. The guidance has advanced by more than 14% over the past three months. As for next year, the Zacks Consensus Estimate of $2.15 per share suggests year-over-year profit growth of more than 40%. The outlook is up nearly 10% from three months ago.
COVENANT TRANS (CVTI): Free Stock Analysis Report
COVENANT TRANS (CVTI): Free Stock Analysis Report
FORWARD AIR CRP (FWRD): Free Stock Analysis Report
FORWARD AIR CRP (FWRD): Free Stock Analysis Report
OLD DOMINION FL (ODFL): Free Stock Analysis Report
OLD DOMINION FL (ODFL): Free Stock Analysis Report
PATRIOT TRANSPT (PATR): Free Stock Analysis Report
PATRIOT TRANSPT (PATR): Free Stock Analysis Report
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