Shares of Old Dominion Freight Line (ODFL) plummeted 6.4% on October 23, 2024, after the trucking company reported disappointing third-quarter results and warned of ongoing economic challenges impacting its business.
The company's revenue for the quarter fell by 3.0% year-over-year to $1.47 billion, missing analysts' expectations of $1.49 billion. This decrease was primarily driven by a 4.8% drop in less-than-truckload (LTL) tons per day, partially offset by a 1.5% increase in LTL revenue per hundredweight.
Despite the revenue decline, Old Dominion's earnings per diluted share (EPS) of $1.43 met analysts' consensus estimate of $1.42. However, the EPS figure represented a 7.1% decrease compared to the same quarter last year, marking the first year-over-year decline in quarterly earnings for the company in 2024.
In its earnings release, Old Dominion cited "ongoing softness in the domestic economy" as a key factor behind its disappointing results. The challenging operating environment and strong comparable results from the prior year contributed to the decrease in revenue and earnings.
Furthermore, the company's operating ratio, a key measure of efficiency, deteriorated by 210 basis points to 72.7% for the third quarter, as the lower revenue had a deleveraging effect on operating expenses. Direct operating costs also increased as a percentage of revenue, driven by higher costs associated with the company's group health and dental plans.
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