Subscribe to our free, weekly email newsletter!


Old Dominion Freight Line updates Q4 growth forecast

By Jeff Berman, Group News Editor
December 03, 2013

Less-than-truckload (LTL) carrier Old Dominion Freight Line (ODFL) is feeling optimistic as the calendar officially turned to the final month of the year, announcing various fourth quarter growth and revenue updates today.

ODFL is calling for an annual increase tons per day in the 9.5 percent-to-ten percent range, which is ahead of a previous forecast of 9 percent-to-ten percent growth, adding that tons per day increased at 8.5 percent and 10.3 percent, respectively, on an annual basis on October and November.

And it also said it expects revenue per hundredweight, excluding fuel surcharges, to rise 1.5 percent-to-2 percent annually, ahead of previously forecasted ranges of 1.5 percent-to-2 percent.

“Old Dominion has continued to produce solid revenue growth in the fourth quarter of 2013 through a combination of increased tons and yield,” said David S. Congdon, President and Chief Executive Officer of Old Dominion, in a statement. “We believe our growth in October and November was the result of increased market share while also maintaining our core pricing philosophy. Our updated guidance for revenue per hundredweight, excluding fuel surcharges, reflects changes to the mix of our freight that can lower this metric. We remain committed to providing superior service at a fair and equitable price and believe this value proposition should allow us to continue to win market share.”

In the third quarter of this year, ODFL reported revenue was $616.5 million, which was up 12.0 percent from the $550.5 million for the third quarter of 2012. Net income increased 17.8% to $60.1 million for the third quarter of 2013 from $51.0 million for the third quarter last year, while earnings per diluted share rose 18.6% to $0.70 from $0.59 for the prior-year quarter. Old Dominion’s operating ratio improved to 84.1% for the third quarter of 2013 compared with 85.3% for the third quarter of 2012.

Stifel Nicolaus analyst David Ross wrote in an October research note that ODFL has an efficient network operation, industry-leading service quality, proven price disciplined, expanding service portfolio, and significant profitable market share gains, adding that as the rest of the industry gradually improves, Old Dominion should also get better and at least maintain its margin lead over the rest.”

Ross added that the LTL industry backdrop remains favorable, in Stifel’s view, for continued rate increases and margin expansion, as long as freight volumes remain in positive territory, and he expects pricing to rise faster than volume at about 2 percent-to-3 percent annual yield growth

Freight density, cost control, and pricing discipline continue to be three main themes for the LTL sector since the depths of the recession in 2009. A good number of publicly traded LTLs had strong third quarter performances.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through December 20 with a nearly $11 billion stopgap fix.

Article Topics

News · LTL · ODFL · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA