Old Dominion doubles 2Q net income

user-gravatar Headshot

Old Dominion

Old Dominion Freight Line Inc. on Wednesday, July 28, announced revenue for the second quarter ended June 30 increased 16.5 percent for the quarter to $368.3 million from $316.2 million for the second quarter of 2009. Net income was $21.5 million compared with $10.7 million. Old Dominion’s operating ratio improved to 89.1 percent from 93.2 percent.

For the first six months of 2010, revenue increased 12.2 percent to $686.0 million from $611.3 million for the first half of 2009. Net income was $29.2 million, up from $14.7 million. The company’s operating ratio improved to 91.8 percent from 94.8 percent. Results for the second quarter and first six months of 2010 reflect lower depreciation expense resulting from changes to the estimated useful lives and salvage values for equipment that became effective Jan. 1, 2010.

“We are encouraged by the strength of our second-quarter operating results compared to the second quarter of 2009 and with the improving trends in our revenue and tonnage growth,” says David S. Congdon, president and chief executive officer of Thomasville, N.C.-based Old Dominion. “The 16.5 percent increase in our second-quarter revenue was driven by a 13.4 percent increase in tonnage, the first double-digit tonnage increase we have achieved in two years.” This increase in tonnage was the result of a 6.9 percent increase in shipments and a 6.0 percent increase in weight per shipment. “As a result of our tonnage growth, we generated substantial operating leverage during the second quarter and first half of 2010 that was primarily responsible for doubling our earnings per diluted share for those periods,” Congdon said.

Congdon said the company’s outlook remains somewhat cautious for the second half of 2010, despite healthy tonnage and revenues for the month of July. “We remain uncertain about the strength and sustainability of the economic recovery as well as the potential impact from regulatory changes affecting, among other issues, healthcare, energy, labor and taxes,” he said. “We are encouraged, however, by our second-quarter results and recent operating trends. Based on these trends, we anticipate tonnage to increase in a range of 15 percent to 20 percent for the third quarter compared with the third quarter of 2009. With significant available equipment and service center capacity, we believe Old Dominion is well-positioned to continue to benefit from a strengthening economic environment.”