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Old Dominion Posted Strong Revenue Growth in 4Q17

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Old Dominion’s 4Q17 revenues

In the LTL (less-than-truckload) industry (XLI), top-line growth is driven by pricing ability, volume mix, and revenue per hundredweight. Old Dominion Freight Line (ODFL) saw its 4Q17 total revenues rise 19.4% to $891.1 million from $745.4 million the previous year.

For fiscal 2017, Old Dominion’s revenues were $3.35 billion—up 12.3% from $2.99 billion the previous year.

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Management’s insights

On the 4Q17 financial results, David Congdon, Old Dominion’s CEO, said, “Revenue for the fourth quarter increased 19.5%, which consisted of a 14.4% increase in LTL tonnage and a 5.1% increase in LTL revenue per hundredweight. The increase in our LTL tonnage included an 11.4% increase in LTL shipments and a 2.7% increase in LTL weight per shipment. We believe the industry pricing environment strengthened in the fourth quarter, which drove the 3.1% increase in our LTL revenue per hundredweight, excluding fuel surcharges.”

He also said, “we will continue to target rate increases necessary to offset cost inflation in our business and address individual account profitability. In the current pricing environment, we believe that this approach will enhance our ability to win market share and produce profitable growth.” Old Dominion expects strong growth in revenue per day and LTL tons per day in 1Q18.

Peers’ 4Q17 revenues

Regional and interregional LTL service provider YRC Worldwide (YRCW) reported $1.20 billion in revenues in 4Q17—up 5.3% from $1.14 billion the previous year. XPO Logistics (XPO), which has expedited its target hunt in 2018, posted solid revenue growth of 14.1%. YRC Worldwide’s 4Q17 revenues were $4.19 billion—compared to $3.67 billion in 4Q16.

SAIA’s (SAIA) revenues rose 17.6% to $353.30 million from $300.22 million in 4Q16. ArcBest (ARCB) registered a 3.3% rise in its 4Q17 revenues to $710.12 million from $688.21 million in 4Q16.

Next, we’ll look at Old Dominion’s operating margins in 4Q17.

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