At first glance: Old Dominion Q2 revenue

In a news release Wednesday, the old Dominion Cargo Line, a carrier with low trucks, said its second quarter results reflect “continuous softness in the domestic economy.”

Old Dominion (NASDAQ:ODFL) Second quarter earnings per share were $1.27, reported consensus estimates of penny light and 21 cents year-on-year. The decline in net interest income was nearly two cents of drug compared to the same period last year.

Revenue fell to 6% y/y to $1.41 billion, slightly below the consensus. A 9.3% reduction in Y/Y tonnage was a combination of DIP, with a 7.3% reduction in shipments and a 2.1% weight per cargo.

The weak amount was partially offset by an increase of 3.4% y/y in revenue per 100 body weight or yield. Yields were 5.3% higher, excluding fuel surcharges. The reduction in shipping weight was a modest tailwind over the yield metric.

Yields (excluding fuel) rose more than 10% over the two-year period.

“Old Dominion continues to manage through a difficult operational environment that has been going on for longer than expected,” Marty Freeman, president and CEO of Old Dominion, said in a news release. “Demand for our services continues to be affected by a challenging economy, but we are confident that we are well positioned in the long run.”

The company reported an operating rate of 74.6% (inverse of the operating margin). This was 80 bps from the first quarter with Y/Y at 270 basis points. This compares with management guidance for continuous improvements of approximately 100 bps. (Carriers typically see a continuous margin improvement of 300-350 bps in the second quarter.)

Costs per cargo increased by 5.1%, revenue per shipment increased by just 1.2%, with a negative spread of 390 bp.

Salary, wages and benefits expenses (as a percentage of revenue) increased by 210 bps y/y. A 4.8% drop in personnel has overtaken more in a larger step when it was shipped. Increases in total employee benefit costs were also a quarterly headwind.

The depreciation and amortization expenses were 80 bps y/y.

ODFL shares fell 5% in pre-market trading on Wednesday.

Old Dominion will hold a conference call at 10am EDT on Wednesday to discuss the results of the second quarter.

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