Old Dominion Faces Declining Earnings Ahead of Q4 Report
Analysts Prepare for Less-Than-Expected Results as Company Adjusts to Market Challenges
Old Dominion Freight Line, Inc. (ODFL), based in Thomasville, North Carolina, stands out as a top player in transportation and logistics, primarily focusing on less-than-truckload (LTL) shipping services. The company boasts a market cap of $38.6 billion and is known for prioritizing operational efficiency and sustainability. As it prepares to announce its fourth-quarter earnings on Wednesday, January 29, analysts remain watchful of the anticipated outcomes.
Once the report is released, analysts project a profit of $1.17 per share, which marks a decline of 20.4% compared to $1.47 in the same quarter last year. Even so, Old Dominion has reliably matched or outperformed Wall Street’s adjusted EPS estimates in each of the last four quarters.
In their previous quarter (Q3), the company’s adjusted earnings came in at $1.43 per share, aligning with consensus forecasts. However, performance has been affected by a downturn in freight demand, reduced sales volumes, and shrinking profit margins.
For the fiscal year 2024, analysts foresee an adjusted EPS of $5.42, which represents a 3.7% decrease from $5.63 in fiscal 2023. The outlook improves in fiscal 2025, where EPS is expected to recover, showing a growth of 9% to reach $5.91.
Over the past year, Old Dominion’s shares have fallen by 4.8%, underperforming the S&P 500 Index’s ($SPX) 27.2% gains and the Industrial Select Sector SPDR Fund’s (XLI) 18.9% returns.
A significant drop occurred on October 23, when shares fell nearly 5.5% post the release of disappointing Q3 earnings. With reported revenue at $1.47 billion, the company missed analysts’ expectations of $1.49 billion by 1.3%. EBITDA also fell short, coming in at $488.5 million, missing estimates by 1.7%.
Despite facing these challenges, Old Dominion saw a substantial improvement in its free cash flow margin, increasing to 46.9% from 17.3% the previous year. Nonetheless, sales volumes continued to decline, falling by 1.9% year-over-year.
The current view on ODFL stock is cautiously optimistic, holding an overall “Hold” rating among analysts. Out of 20 professionals covering the stock, three recommend a “Strong Buy,” one suggests a “Moderate Buy,” 14 advise a “Hold,” and two suggest a “Strong Sell.”
Furthermore, the average analyst price target for ODFL stands at $204.31, indicating a potential upside of 11.8% from current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
