Old Dominion more than doubles 3Q net income

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Old Dominion Freight Line Inc. on Wednesday, Oct. 27, announced that revenue for the third quarter ended Sept. 30 increased 22.7 percent to $396.0 million from $322.8 million for the third quarter of 2009. Net income increased 132.3 percent to $24.4 million compared with $10.5 million. The company’s operating ratio improved to 89.0 percent from 93.8 percent.

For the first nine months of 2010, revenue increased 15.8 percent to $1.08 billion from $934.1 million for the comparable period in 2009. Net income was $53.6 million compared with $25.2 million. The company’s operating ratio improved to 90.8 percent from 94.5 percent. The Thomasville, N.C.-based company says its results reflect lower depreciation expense resulting from changes to the estimated useful lives and salvage values for its equipment that became effective Jan. 1, 2010.

“Old Dominion’s growth accelerated during the third quarter as a 21.5 percent increase in tonnage drove strong operating leverage,” said David S. Congdon, president and chief executive officer. Congdon said the company’s tonnage in the third quarter also increased 6.4 percent over the second quarter of 2010, which is significantly greater than the 1.5 percent average sequential increase between the second and third quarters over the past 10 years. “While aggregate LTL industry results for the third quarter are not yet available, we are confident our tonnage growth will indicate that we continued to gain market share in the quarter.”

Congdon said Old Dominion also experienced continued firming in its pricing throughout the third quarter of 2010. “We anticipate further strengthening in the overall industry pricing environment due to reduced capacity in the LTL industry and as general rate increases that have been recently announced by a number of other LTL carriers take effect,” he said. “The significant growth in tonnage and firming of our pricing in the third quarter created substantial operating leverage.”

Congdon said that as the pricing environment firms, Old Dominion believes that shippers will place increased value on service, which “positions us well for increased market share gains. The combination of increased volumes and price stability should enhance our operating efficiencies and increase our profitability.”