THOMASVILLE, N.C. — Old Dominion Freight Line’s financial results for the three-month and nine-month periods ended September 30 show a continued softness in the domestic economy.
All prior-period share and per share data in this release have been adjusted to reflect the Company’s March 2024 two-for-one stock split.
“Old Dominion’s third quarter financial results reflect ongoing softness in the domestic economy,” said Marty Freeman, president and CEO of Old Dominion. “The challenging operating environment, and strong comparable results for the third quarter of 2023, resulted in the first year-over-year decrease in our quarterly revenue and earnings per diluted share this year. Our market share and volume trends, however, remained relatively consistent with the first half of this year while our yield continued to improve. The consistency in our market share and yield performance continued to be supported by our best-in-class service, as we once again provided our customers with 99% on-time service and a cargo claims ratio of 0.1% during the quarter.”
Freeman noted in a company press release that revenue for the third quarter decreased by 3.0%, due primarily to a 4.8% decrease in LTL tons per day that was partially offset by a 1.5% increase in LTL revenue per hundredweight. We also had one additional operating day as compared to the third quarter of 2023. The decrease in LTL tons per day reflects a 3.4% decrease in LTL shipments per day and a 1.4% decrease in LTL weight per shipment. LTL revenue per hundredweight, excluding fuel surcharges, increased 4.6% as compared to the third quarter of 2023, as the company maintained its long-term and disciplined approach to pricing. The company will continue to focus on consistently improving yields to offset cost inflation and support ongoing investments in capacity, technology, and the OD Family of employees.
“Our operating ratio increased by 210 basis points to 72.7% for the third quarter of 2024,” Freeman said. “The decrease in revenue had a deleveraging effect on many of our operating expenses, which contributed to the 110 basis point increase in our overhead costs as a percent of revenue. Direct operating costs also increased as a percent of revenue despite our team operating very efficiently during the third quarter. The increase in our direct operating costs as a percent of revenue was primarily due to an increase in costs associated with our group health and dental plans. The combination of the decrease in our revenue and the increase in our operating ratio resulted in the 7.1% decrease in earnings per diluted share to $1.43 for the third quarter.”
Cash Flow and Use of Capital
Old Dominion’s net cash provided by operating activities was $446.5 million for the third quarter of 2024 and $1.3 billion for the first nine months of the year, according to the release. The company had $74.2 million in cash and cash equivalents at September 30, 2024.
Capital expenditures were $242.8 million for the third quarter of 2024 and $600.4 million for the first nine months of the year. The Company expects its aggregate capital expenditures for 2024 to total approximately $750 million, including planned expenditures of $350 million for real estate and service center expansion projects; $325 million for tractors and trailers; and $75 million for information technology and other assets.
Old Dominion continued to return capital to shareholders during the third quarter of 2024 through its share repurchase and dividend programs. For the first nine months of this year, the Company utilized $824.8 million of cash for its share repurchase program, including a $200.0 million accelerated share repurchase agreement that will expire no later than November 2024, and paid $168.2 million in cash dividends.
“During the third quarter, Old Dominion continued to execute on the same long-term strategic plan that has guided our success for many years, Freeman said. “This plan is centered on our ability to deliver superior service at a fair price, which has helped us create a best-in-class value proposition. We continue to believe that the consistency and quality of our service performance has differentiated Old Dominion in the marketplace and driven our long-term profitable growth. This is why our team is incredibly motivated to keep delivering on our promise to provide superior service and value to our customers, as we believe executing on the fundamental aspects of our business plan will win additional market share and drive increased shareholder value.”
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
