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Yahoo
04-06-2025
- Business
- Yahoo
Old Dominion Blames ‘Economic Softness' for Revenue, Volume Slips
Old Dominion says softness in the domestic economy has tanked demand and volumes, costing the trucking giant revenue. In a second-quarter sales update, the less-than-truckload (LTL) giant acknowledged that revenue per day decreased 5.8 percent in May from the year prior. More from Sourcing Journal Trump Doubles Duties on Metals, Judge Dismisses California's Tariff Lawsuit Global Economic Growth Will Be Blunted By US Tariffs, OECD Says Flexport Debuts Tariff Simulator as Customers 'Need Clarity on Costs' The average total is a slight improvement from the 6 percent decline that Old Dominion forecast for the full month of April, when macroeconomic uncertainty surrounding the Trump administration's tariffs began to show its face. But the 5.8-percent drop is still worse than the initially expected 5-percent-per-day weakening of revenue for the full second quarter, outlined by chief financial officer Adam Satterfield in an April earnings call. At the time, he expected total revenue for the quarter to come in at $1.4 billion. Old Dominion Freight Line CEO and president Marty Freeman didn't explicitly mention tariffs in his statement. But trucking companies in general, which already have been navigating through a three-year freight recession, have had to deal with blowback from the duties initially put into effect in April. As import bookings into the U.S. fell and ocean carriers began blanking sailings on the Pacific Ocean, trucking firms endured a brief period where cargo pickups out of America's two largest ports—Los Angeles and Long Beach—plummeted. Alongside the tariffs, the Purchasing Managers' Index (PMI), which gauges the overall monthly health of the manufacturing sector, stayed in contraction territory during May at a rate of 48.5 (an index over 50 represents growth). Struggling domestic manufacturing activity has hampered trucking industry demand throughout the freight recession. May's overall tonnage numbers did not help Old Dominion's case. The main culprit for the trucking firm's daily revenue decline was an 8.4 percent decrease in LTL tons per day—itself a larger descent than the 6.3 percent decrease the company experienced in the first quarter. A 6.8 percent dip in daily LTL shipments, along with a 1.9 percent decrease in LTL weight per shipment, contributed to the tons-per-day decline. The falloff was partially offset by an increase in LTL revenue per hundredweight, which refers to the revenue generated for each 100 pounds of freight shipped. Total May revenues for Old Dominion were also impacted by lower fuel prices, which kept down rates. Although the company didn't have a material stock price change due to the update, BofA Securities analysts revised their price target for the company down from $183 to $171. The change came just two days after Goldman Sachs increased its target for Old Dominion from $190 to $200, while upgrading the company from 'neutral' to 'buy.' Nevertheless, Old Dominion remains undeterred in maintaining its place among its LTL brethren. Satterfield said market share remained within 12 percent to 13 percent in the April call, with Freeman indicating that its position was unchanged. 'We believe that our market share has remained relatively consistent throughout this extended period of economic softness, despite the year-over-year decrease in our LTL volumes,' said Freeman. 'Customers have continued to value our industry-leading service, which supports our ongoing yield management initiatives. While the macroeconomic environment remains uncertain, we will continue to focus on executing on our long-term strategic plan.' As Old Dominion navigates the soft demand environment, one of its top former competitors is still aiming to offload more real estate as it liquidates. Yellow Corp., which ceased operations in July 2023 and has since endured a two-year bankruptcy process, laid out plans to tentatively sell four more terminals for $6.8 million. The trucking company's estate filed a motion with a Delaware bankruptcy court Friday requesting approval for the sale. The owned properties include a $2.6 million, 68-door terminal in Knoxville, Tenn. and a 46-door site in Southington, Conn. that would sell for $2.8 million. Two smaller sales would be a $1.2 million, 31-door terminal in Port Allen, La., and a $285,000, 12-door service center in Tupelo, Miss. Unlike many of Yellow's other terminal sales, which have gone to companies like Old Dominion, XPO, Estes Express Lines and Knight-Swift, these divestitures are not to trucking firms. Prior to these sales, the estate sold off 10 service centers last month for $14.3 million, including three to another former competitor, Saia. A separate Friday filing with the court showed that Yellow is rejecting unexpired leases on four terminals with a total of 328 doors. Those facilities are in Phoenix; North Billerica, Mass.; Visalia, Calif.; and Manassas, Va. Yellow's estate has sold roughly 190 terminals for more than $2.2 billion since its liquidation first began in December 2023. The first bankruptcy auction divested the bulk of terminals, with 130 offloaded for a combined $1.88 billion. The company now has roughly 70 owned and leased terminals that have remained unsold. Sign in to access your portfolio
Yahoo
17-05-2025
- Business
- Yahoo
Old Dominion Freight Line Insiders Sell US$32m Of Stock, Possibly Signalling Caution
The fact that multiple Old Dominion Freight Line, Inc. (NASDAQ:ODFL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more. While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The Executive Chairman of the Board, David Congdon, made the biggest insider sale in the last 12 months. That single transaction was for US$14m worth of shares at a price of US$226 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$171. So it is hard to draw any strong conclusion from it. Over the last year we saw more insider selling of Old Dominion Freight Line shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below! See our latest analysis for Old Dominion Freight Line For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket. It's good to see that Old Dominion Freight Line insiders have made notable investments in the company's shares. Executive VP Adam Satterfield spent US$432k on stock, and there wasn't any selling. This makes one think the business has some good points. I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Old Dominion Freight Line insiders own 11% of the company, currently worth about US$3.8b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders. The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The recent buying by an insider , along with high insider ownership, suggest that Old Dominion Freight Line insiders are fairly aligned, and optimistic. Of course, the future is what matters most. So if you are interested in Old Dominion Freight Line, you should check out this free report on analyst forecasts for the company. Of course Old Dominion Freight Line may not be the best stock to buy. So you may wish to see this free collection of high quality companies. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-04-2025
- Business
- Yahoo
ODFL Q1 Earnings Call: Management Focuses on Cost Discipline Amid Freight Demand Uncertainty
Freight carrier Old Dominion (NASDAQ:ODFL) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 5.8% year on year to $1.37 billion. Its non-GAAP profit of $1.19 per share was 4.3% above analysts' consensus estimates. Is now the time to buy ODFL? Find out in our full research report (it's free). Revenue: $1.37 billion vs analyst estimates of $1.37 billion (5.8% year-on-year decline, in line) Adjusted EPS: $1.19 vs analyst estimates of $1.14 (4.3% beat) Adjusted EBITDA: $427.2 million vs analyst estimates of $412 million (31.1% margin, 3.7% beat) Operating Margin: 24.6%, down from 26.5% in the same quarter last year Free Cash Flow Margin: 17.8%, down from 21% in the same quarter last year Sales Volumes fell 6.5% year on year (-0.5% in the same quarter last year) Market Capitalization: $32.57 billion Old Dominion's first quarter results were shaped by persistent softness in freight volumes and ongoing macroeconomic challenges. Management attributed the year-on-year revenue decline primarily to lower shipment counts, stating that 'our revenue and earnings per diluted share both declined as a result' of weaker domestic economic activity. However, they emphasized operational discipline, highlighting improvements in productivity such as higher shipments per hour and continued best-in-class service metrics. Looking ahead, management signaled a cautious outlook, citing ongoing uncertainty in the economic environment and freight demand. CEO Marty Freeman noted, 'while there are still several workdays that remain in April, our month-to-date revenue per day has decreased 7% on a year-over-year basis.' The company is reducing capital expenditures for the remainder of the year and focusing on cost controls, while maintaining investments in network capacity to capture market share when volumes recover. Management reiterated that clarity around tariffs and regulations could be key to a sustained rebound in demand. Old Dominion's leadership outlined the main themes influencing first quarter performance and set the stage for their strategy moving forward. The focus remained on balancing yield management with operating density and managing costs in a soft demand environment. Freight Volume Decline: Management stressed that lower less-than-truckload (LTL) shipments per day, driven by weak industrial and retail demand, was the central factor impacting revenue. Despite the decline, market share remained stable. Yield Management Discipline: The company maintained a cost-based approach to pricing, achieving increases in revenue per hundredweight even as volumes fell. CFO Adam Satterfield said, 'we're fully committed to our long-term yield management strategy.' Operating Efficiency Investments: Old Dominion improved productivity metrics such as shipments per hour, despite reduced network density. Management cited ongoing investments in automation, technology, and training as key to these gains. Network and Capacity Expansion: The company continued to expand its service center network and fleet capacity over recent years, positioning itself for growth when demand returns. Management noted that over 30% excess capacity remains in its real estate network, with recent reductions in planned capital expenditures to align with current demand. Industry Capacity Constraints: Executives highlighted that industry-wide reductions in service centers, particularly after the exit of Yellow, have created a more capacity-constrained LTL market. This dynamic could support pricing power and market share gains as freight demand recovers. Management's outlook for the coming quarters centers on cautious optimism, with a focus on operational discipline and readiness to capture market share if freight volumes recover. The main themes shaping guidance are ongoing economic uncertainty, continued cost controls, and strategic capacity investments. Macroeconomic Uncertainty: Management cited ongoing uncertainty regarding tariffs, manufacturing investment, and customer confidence as key factors limiting a near-term recovery in freight volumes. Cost Management Focus: The company is reducing capital spending and discretionary expenses in response to lower freight activity, with a $125 million cut to 2025 capital expenditures. This should help protect margins until volume growth resumes. Positioning for Growth: Despite near-term headwinds, Old Dominion continues to invest in its network and workforce, aiming to capture outsized share gains when the freight market improves. Management highlighted that 'our network is built for more shipments per day than what we're handling right now.' Jordan Alliger (Goldman Sachs): Asked about typical margin seasonality and the impact of prolonged industry softness on margins; management explained that if revenue remains flat, only modest operating margin improvement is expected next quarter. Ravi Shanker (Morgan Stanley): Questioned the rationale behind capital expenditure reductions; CFO Adam Satterfield clarified that project deferrals are due to economic uncertainty, not a change in long-term strategy. Tom Wadewitz (UBS): Inquired about retail exposure and potential competitive threats from Amazon and UPS; management said retail is about 25-30% of business and does not see Amazon's LTL offering as a material threat. Scott Group (Wolfe Research): Probed on pricing power and whether Old Dominion can continue achieving price increases; management maintained that its value proposition allows for ongoing yield improvement even in a competitive environment. Bascome Majors (Susquehanna): Asked about changes in the competitive landscape and industry capacity following Yellow's exit; management emphasized that industry-wide capacity is down, with Old Dominion well positioned due to ongoing network investments. In the upcoming quarters, the StockStory team will watch (1) for signs of stabilization or improvement in LTL shipment volumes, (2) whether cost control initiatives and lower capital spending can help protect operating margins, and (3) continued progress in expanding network capacity for future growth. The interplay between macroeconomic clarity—especially regarding tariffs and manufacturing investment—and management's disciplined execution will be critical signposts for assessing business momentum. Old Dominion Freight Line currently trades at a forward P/E ratio of 28.1×. In the wake of earnings, is it a buy or sell? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today.
