Old Dominion Freight Line Inc. on Wednesday, Feb. 2, announced fourth-quarter 2010 revenue increased 28.3 percent to $399.0 million from $310.9 million for the fourth quarter of 2009. Net income was $22.1 million, up 127.8 percent from $9.7 million. Old Dominion’s operating ratio improved to 90.5 percent from 93.9 percent.
For the year ended Dec. 31, revenue grew 19.0 percent to $1.48 billion from $1.25 billion for 2009. Net income increased 116.9 percent to $75.7 million compared with $34.9 million. The company’s operating ratio improved to 90.7 percent from 94.3 percent.
“Old Dominion produced strong revenue growth for the fourth quarter, as a 19.9 percent increase in shipments drove a 20.5 percent increase in tons compared with the fourth quarter of 2009,” said David Congdon, president and chief executive officer of the Thomasville, N.C.-based company. “Some of this increase can be attributed to the continued growth in U.S. industrial production and manufacturing, which has not only boosted volumes for transportation providers, but also decreased excess capacity in our industry. As a result, a number of LTL carriers announced general rate increases in the fourth quarter of 2010, which has improved the overall pricing environment for our services.”
Old Dominion on Nov. 15 implemented a general rate increase of 4.9 percent, which Congdon said contributed to a 5.9 percent increase in revenue per hundredweight for the fourth quarter as compared to the prior-year period. Excluding fuel surcharges, revenue per hundredweight for the fourth quarter increased 3.4 percent over the comparable quarterly period.
“The substantial growth in tonnage for the fourth quarter and improved pricing generated significant operating leverage, resulting in a 340 basis-point improvement in our operating ratio,” Congdon said. “We added employees in 2010 to meet increased tonnage levels. Primarily as a result of the cost to train these new employees, our operating leverage was negatively affected by slight reductions in some measures of our productivity. Despite these additional costs incurred in 2010, our team produced record revenues for the fourth quarter and second half of 2010 and the best operating ratios for these periods since 2006.”