Why Old Dominion Freight Line Shares Are Slumping Today

Old Dominion Freight Line, Inc. ODFL shares are trading lower following a first-quarter FY24 revenue miss.

Revenue rose 1.2% Y/Y to $1.460 billion, missing the consensus of $1.473 billion.

The increase in revenue is primarily due to a 4.1% rise in LTL revenue per hundredweight, which was partly offset by a 3.2% decrease in LTL tons per day. 

LTL tons per day decline reflects a 2.7% Y/Y decrease in LTL weight per shipment and a 0.5% Y/Y decrease in LTL shipments per day. 

Also, revenue decreased by 24.9% Y/Y in the other services segment in the quarter.

Operating income increased by 0.9% Y/Y to $386.4 million, with an operating ratio of 73.5%, compared to 73.4% a year ago. EPS of $1.34 was in line with the consensus.

Old Dominion's operating cash flow was $423.9 million for the first quarter. The company had $581.0 million in cash and equivalents as of March-end. Capital expenditures stood at $119.5 million in the first quarter.

In the first quarter of FY24, Old Dominion returned $85.3 million through share repurchases and $56.6 million via cash dividends to the stockholders.

Marty Freeman, president and CEO, said, “While challenges from the domestic economy have persisted for longer than we originally expected, there have been some recent developments to suggest that overall demand for our service may be improving.”

Investors can gain exposure to the stock via IShares Trust IShares U.S. Transportation ETF IYT and ProShares Trust ProShares Supply Chain Logistics ETF SUPL.

Price Action: ODFL shares are down 10.9% at $195.31 at the last check Wednesday.

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