Old Dominion Freight Line Revenue up 15.2% Q4 2018

Robust U.S. economy helped Old Dominion deliver strong financial results for the fourth quarter of 2018

Greg C. Gantt, President and Chief Executive Officer of Old Dominion Freight Line, remarked  “We exceeded $1.0 billion of revenue while maintaining an operating ratio below 80.0% for the third straight quarter and were pleased to exceed $4.0 billion of annual revenue for the first time in our Company’s history. The consistent growth in our revenue throughout the fourth quarter reflected the strength of the domestic economy and our ongoing ability to win market share. We continue to win market share by providing shippers with superior service at a fair price, which included 99% on-time deliveries and a cargo claims ratio of 0.3% in the fourth quarter.

“The revenue growth for the fourth quarter was primarily due to a 12.9% increase in LTL revenue per hundredweight and a 2.9% increase in LTL tonnage. The increase in our LTL tonnage included a 6.5% increase in LTL shipments that was partially offset by a 3.3% decrease in LTL weight per shipment. This decrease in LTL weight per shipment, which we expected, is consistent with the trend that we identified and explained earlier in 2018. Our LTL revenue per hundredweight benefitted from the decrease in weight per shipment as well as the 1.0% increase in average length of haul, as the changes to each of these metrics generally result in an increased yield. The improvement in our revenue per hundredweight also reflects our continued focus on individual account profitability, which requires a consistent and long-term improvement in yield to offset our cost inflation while also supporting the continued investment in our business.

“Our operations were very efficient in the fourth quarter of 2018, with an operating ratio that improved 520 basis points to 78.7% from 83.9% in the fourth quarter of 2017. This improvement was primarily the result of quality revenue growth, which allowed us to leverage certain costs, as well as a decrease in our direct operating costs as a percent of revenue. In addition, our fringe benefit costs as a percent of salaries and wages improved to 30.7% as compared to 32.6% in the fourth quarter of 2017. The combination of revenue growth and the improvement in our operating ratio drove a 51.1% increase in income before taxes to $217.4 million. Quarterly earnings per diluted share, however, decreased 18.4% to $1.95, due primarily to the $104.9 million net tax benefit included in the fourth quarter of 2017 as a result of the Tax Cuts and Jobs Act.”

Mr. Gantt concluded, “Our strong operating performance for the fourth quarter and throughout 2018 reflects the consistent execution of our long-term strategy and relentless focus on delivering value to our customers and shareholders. As we begin 2019, we remain committed to our proven business model that has produced long-term profitable growth throughout many economic cycles. This includes not only providing shippers with superior service at a fair price, but also consistently investing in our OD Family of employees and service center capacity to sustain the momentum in our business. With a favorable economic outlook and ongoing demand for our services, we believe Old Dominion is well-positioned to produce profitable growth and increase shareholder value in 2019.”

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