Old Dominion Freight Line rallies after operating ratio improves
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Old Dominion Freight Line (NASDAQ:ODFL) tracked higher in premarket trading after the company topped Q4 earnings estimates and hiked its dividend payout by 50%.
The company noted that Q4 revenue growth was primarily due to a 16.1% increase in LTL revenue per hundredweight and a 14.3% increase in LTL tons per day. The increase in LTL tons included a 17.5% increase in LTL shipments per day that was partially offset by a 2.7% decrease in LTL weight per shipment.
Old Dominion's operating ratio improved 270 basis points to 73.6% during the quarter. The improvement is said to have been driven by ODFL's quality revenue growth and the efficiency of operations. Both ODFL's direct operating costs and total overhead costs as a percent of revenue during the fourth quarter were improved. Salaries, wages and benefit costs as a percent of revenue improved to 46.9% from 50.7% in Q4 of 2020, which more than offset the increases in expense for both operating supplies and purchased transportation. The average number of full-time employees increased 20.3% during the quarter and ODFL intends to hire additional employees in 2022 to support anticipated growth.
Old Dominion Freight Line's (ODFL) net cash provided by operating activities was $340.0M for Q4 and $1.2B for the year.
Shares of Old Dominion Freight Line (ODFL) gained 1.20% premarket to $309.85 vs. the 52-week range of $196.94 to $373.57.