Company Reports

Narrow moat less-than-truckload specialist Old Dominion posted slight 1% year-over-year revenue growth driven by higher all-in yields, as volumes once again declined. Revenue came in slightly below our expected run rate on softer-than-expected tonnage trends.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest US less-than-truckload carrier by revenue (after FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload carrier by revenue (after FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload carrier by revenue (after FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Narrow moat less-than-truckload specialist Old Dominion's top line came in roughly flat year over year, though this is better than the 8% decline posted during the first nine months of 2023, thanks to easing comparisons and freight diversions from bankrupt peer Yellow. Revenue was largely in line with our forecast.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Narrow-moat less-than-truckload specialist Old Dominion's top line fell 5.5% year over year, though this is much better than the 15% decline last quarter thanks to the freight diversions from bankrupt peer Yellow. Revenue was largely in line with our forecast, as we've already been baking in a meaningful sequential uptick in volumes.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, the company kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Narrow-moat less-than-truckload, or LTL, specialist Old Dominion's top line fell 15% year over year, and came in below our forecast on greater-than-expected tonnage declines, though all-in yield (revenue per hundredweight) and operating margin were mostly in line.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less than truckload, or LTL, carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, OD kept its head above water via impressive pricing discipline. While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

We are upgrading our moat rating for Old Dominion to narrow from none. As with the rest of the truckload, or TL, and less than truckload, or LTL, companies we cover, we historically considered Old Dominion a no-moat company, despite its impressive execution and robust economic profit. This is because it is extremely difficult to build a sustainable competitive edge in LTL shipping, as superior processes that optimize line-haul and pickup and delivery efficiency are replicable by well-capitalized competitors over time. Also, for most carriers, scale economies have proven insufficient to produce economic profit over the full cycle. Along these lines, we previously believed that a handful of OD's competitors like XPO, Saia, and FedEx Freight would refine their execution, materially boost terminal capacity, and temper OD's ability to take market share. However, although those carriers have made progress, it's been much slower than expected and they haven't discernably disrupted OD's impressive performance.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload, or LTL, carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, OD kept its head above water via impressive pricing discipline While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload, or LTL, carrier by revenue (following FedEx Freight) and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, OD kept its head above water via impressive pricing discipline While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Top-tier less-than-truckload specialist Old Dominion's top line swung negative, falling 4% year over year (it was still up 6% in the fourth quarter). Revenue came in slightly shy of our forecast due to a greater-than-expected tonnage declines, though yields outperformed modestly. Tonnage declines accelerated in the quarter, falling 12% year over year compared with a 9% contraction last quarter and a 3% fall in the third quarter. Total core yield (revenue per hundredweight excluding fuel) expanded 9%, similar to the fourth-quarter increase. In short, retail-sector restocking has retrenched on elevated inventories, and industrial end markets started softening by the end of 2022, pressuring volumes across the LTL industry following an exceptionally robust growth phase. That said, the current trucking backdrop is not unexpected and we've already been baking in a pullback in 2023.

Following impressive growth over the past decade, Old Dominion Freight Line is now the second-largest U.S. less-than-truckload, or LTL, carrier by revenue and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, OD kept its head above water via impressive pricing discipline While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Following impressive growth over the past decade, Old Dominion Freight Line is now the fourth-largest U.S. less-than-truckload, or LTL, carrier by revenue and the clear industry leader in terms of execution, freight selection, and service quality, which is no small factor for shippers. Even during the Great Recession, OD kept its head above water via impressive pricing discipline While other carriers slashed rates dramatically, Old Dominion held firm, keeping core revenue per hundredweight flat.

Top-tier less-than-truckload specialist Old Dominion Freight Line's year-over-year top-line growth moderated to 6% in the fourth quarter from 15% in the third quarter but was ahead of our forecast as impressive yield (revenue per hundredweight) strength more than offset lower-than-expected tonnage. The general theme is that retail sector inventory restocking has retrenched and U.S. industrial production is slowing; these factors are now pressuring volume across the LTL industry following an incredibly robust growth phase. Generally speaking, this is not a surprise; we've been baking in a pullback that lasts through the first half of 2023. On the positive side, Old Dominion's yield gains—up 17% including higher core pricing and fuel surcharges—remained strong enough to drive up revenue year over year. Yields grew 9% excluding fuel.

Top-tier less-than-truckload specialist Old Dominion Freight Line's revenue grew 9% year over year in the third quarter after rising 22% last quarter. Growth was mostly in line with our anticipated run rate as yield gains came in ahead, including fuel surcharge noise, while tonnage fell slightly short. We have raised our discounted cash flow-derived fair value estimate to $201 per share from $200 to account for the time value of money since our last update.

Following impressive growth over the past decade, Old Dominion is now the fourth-largest U.S. less-than-truckload, or LTL, carrier by revenue and the clear industry leader in terms of execution, freight selection, and service quality (which is no small factor for shippers). Even during the Great Recession, OD kept its head above water via impressive pricing discipline While other carriers slashed rates dramatically, OD held firm, keeping core revenue per hundredweight flat.