Old Dominion Freight Line, Inc.

This is our first report on a major LTL shipping company, Old Dominion Freight Line. The company finished the year with a mixed result as it failed to meet the revenue expectations of Wall Street but managed an earnings beat. Old Dominion continued its winning streak and produced the tenth consecutive quarter of growing revenue and an improved operating ratio. As a result, the company delivered double-digit growth in earnings per diluted share in the fourth quarter. The volume growth they anticipated at the beginning of the year eventually fell short of their early projections. However, they made the required adjustments throughout the year, demonstrating the adaptability and resilience of their long-term strategic plan. Their operating ratio for the fourth quarter increased to 71.2. Besides that, the productive labor expenses as a percentage of revenue decreased by 170 basis points within their direct operating costs, while their purchase transportation costs decreased by 200 basis points. These adjustments offset the 260 basis point rise in operational supplies and costs, principally brought on by the quarter’s sharp rise in diesel fuel and other petroleum-based goods. We initiate coverage on the stock of Old Dominion Freight Line with a ‘Hold’ rating.