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Is a Beat in Store for Old Dominion (ODFL) in Q3 Earnings?

Higher LTL revenues are likely to have aided Old Dominion (ODFL) in the third quarter.

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This story originally appeared on Zacks

Old Dominion Freight Line ODFL is scheduled to report third-quarter 2021 results on Oct 27, before market open.

- Zacks

The Zacks Consensus Estimate for the company’s third-quarter earnings has been revised upward by 1.7% in the past 60 days to $2.37.  The company has an impressive earnings history, having outperformed the Zacks Consensus Estimate in all of the past four quarters. It has a trailing four-quarter earnings surprise of 7.46%, on average.

Old Dominion Freight Line, Inc. Price and EPS Surprise

 

Old Dominion Freight Line, Inc. Price and EPS Surprise

Old Dominion Freight Line, Inc. price-eps-surprise | Old Dominion Freight Line, Inc. Quote

 

Let’s see how things are shaping up for this earnings season.

Gradual recovery in the freight environment is anticipated to have aided Old Dominion’s third-quarter performance. This is expected to be reflected in less than truckload (LTL) revenue per hundredweight. The Zacks Consensus Estimate for LTL revenue per hundredweight in the third quarter suggests a rise of 13.1% from the year-ago quarter’s reported number and a 2.4% improvement from second-quarter 2021’s reported figure. The anticipated improvement in LTL revenue per hundredweight is likely to get reflected in revenues from LTL services, the company’s major revenue-generating segment. Per the consensus estimate, LTL tonnage per day   surged 12.5% from the year-ago-quarter’s reported figure.

Improvement in operating ratio (operating expenses, as a percentage of revenues) is likely to get reflected in third-quarter bottom line (driven by higher revenues).  The Zacks Consensus Estimate for operating ratio is pegged at 73% for the quarter to be reported, indicating an improvement from 75% reported in third-quarter 2020. Lower the value of this key measure of efficiency, the better.

Higher operating expenses (due to rise in costs pertaining to salaries, wages and benefits as well as escalation in operating supplies and expenses) and high capital expenditures are likely to have hurt the company’s bottom line.

What Does the Zacks Model Say?

Our proven model conclusively predicts an earnings beat for Old Dominion this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen, which is exactly the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Old Dominion has an Earnings ESP of +0.49% as the Most Accurate Estimate is pegged at $2.38, higher than the Zacks Consensus Estimate of $2.37. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Old Dominion carries a Zacks Rank #2, currently.

Highlights of Q2 Earnings

Old Dominion Freight Line’s earnings per share of $2.31 outpaced the Zacks Consensus Estimate by 14 cents. The bottom line surged 84.8% year over year. Revenues of $1,319.4 million also surpassed the Zacks Consensus Estimate of $1,240.8 million and increased 47.2% year over year as well.

Other Stocks to Consider

Investors interested in the broader Transportation  sector may also consider United Parcel Service, Inc. UPS, Ryder System, Inc. R and C.H. Robinson Worldwide, Inc. CHRW. These stocks also possess the right combination of elements to beat on earnings this reporting cycle.

UPS has an Earnings ESP of +1.27% and is Zacks #3 Ranked, presently. The company will release third-quarter 2021 results on Oct 26.

Ryder has an Earnings ESP of +4.73% and a Zacks Rank #1. The company will report third-quarter results on Oct 27.

C.H. Robinson has an Earnings ESP of +1.06% and is currently a #3 Ranked player. The company will release third-quarter 2021 results on Oct 26.

 



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