Old Dominion reports record 3Q revenue, flat profit

user-gravatar

Old Dominion Freight Line today, Oct. 25, announced financial results for the third quarter and nine months ended Sept. 30. For the third quarter, revenue was a record $363.3 million, an increase of 7.6 percent from $337.6 million for the third quarter of 2006. Net income for the third quarter of 2007 was $20.0 million, compared with $20.1 million for the third quarter of 2006. Old Dominion’s operating ratio was 90.6 percent for the third quarter of 2007, compared with 89.1 percent for the third quarter of 2006.

Revenue increased 8.6 percent to $1.04 billion for the first nine months of 2007 from $960.0 million for the first nine months of 2006. Net income increased to $56.1 million for the first nine months of 2007 from $54.7 million for the same period in 2006. The company’s operating ratio was 90.4 percent for the latest nine-month period, compared with 89.7 percent for the first nine months of 2006.

“Old Dominion produced solid operating and financial results for the third quarter in an industry environment that continues to be very challenging,” said Earl E. Congdon, chairman and chief executive officer of the Thomasville, N.C.-based less-than-truckload carrier. “We are pleased with the 8.7 percent growth in our total tons shipped during the quarter, which surpassed our tonnage growth of 7.4 percent for both the first and second quarters of 2007. In addition, we achieved this growth against a tough comparison in the third quarter of 2006 that produced a 15.3 percent increase in tons.

“The pricing environment, however, was increasingly competitive during the third quarter, as indicated by the decline in our revenue per hundredweight of 0.7 percent from the third quarter of 2006 and 0.9 percent sequential decline from the second quarter of 2007,” Congdon said. “Although we anticipate the competitive pricing landscape will extend into 2008, we will continue to follow our basic pricing philosophy of evaluating each individual account for profitability in an effort to maintain rational pricing for our services.”

Congdon said Old Dominion continues to be cautious about the LTL industry’s growth prospects for the fourth quarter of 2007. “We continue to expect that our tonnage for the fourth quarter of 2007 will improve over the same period of the prior year,” he said. “However, we expect that soft demand within our industry will continue to drive a highly competitive environment, particularly with respect to pricing.”