Why is Old Dominion (ODFL) down 12.8% since its last earnings report?

A month has passed since Old Dominion Freight Line (ODFL) last reported earnings. Shares have lost about 12.8% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Old Dominion due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the company’s most recent earnings report in order to better understand the important catalysts.

Outperformed Old Dominion in the first quarter

Old Dominion Freight Line’s first-quarter 2024 earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.33 and increased 3.9% year-over-year. Management stated that all share data, even for the prior year period, had been adjusted to reflect a two-for-one stock split. The stock split was announced by ODFL in the first quarter.

Revenues of $1.46 billion topped the Zacks Consensus Estimate of $1.47 billion but increased 1.2% year-over-year. Growth in less-than-truckload or LTL revenue per hundredweight and initiatives to improve efficiency helped drive results.

LTL revenue was $1.45 billion, up 1.6% year-over-year. Revenue from other services fell 24.9% to $13.34 million.

During the quarter, LTL weight per shipment decreased 2.7% and LTL revenue per shipment increased 1.3%. Each LTL shipment and LTL shipment per day decreased 0.5% year-over-year. LTL revenue per hundredweight increased 4.1%.

Total operating expenses increased 1.3% to $1.07 billion. Operating income increased 0.9% to $386.4 million.

Old Dominion ended the March quarter with cash and cash equivalents of $581 million, compared to $433.8 million at the end of the prior quarter. Long-term debt of $59.98 million remained unchanged. Capital expenditure incurred in the reported quarter amounted to USD 119.5 million.

In March, Old Dominion paid a $56.6 million dividend and repurchased $85.3 million of stock. In 2024, ODFL expects total capital expenditure to be approximately $750 million. Of that amount, $350 million is expected to be invested in real estate expansion projects and service centers, $325 million in tractors and trailers and $75 million in information technology and other assets.

How have estimates changed since then?

It turns out that new estimates have been trending downward over the past month.

Due to these changes, the consensus estimate moved -10.56%.

VGM results

Old Dominion currently has an excellent Growth Score of A, although it lags significantly behind its Momentum Score of C. However, the stock is rated F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, Old Dominion carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

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