Old Dominion Freight Line Q1 Profit Falls 12.9%; OR Weakens
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Profit at Old Dominion Freight Line and executives say growing optimism about the prospects for upcoming quarters has been temporarily squelched by macroeconomic uncertainty.
Thomasville, N.C.-based ODFL’s net income fell 12.9% year over year to $254.66 million in the most recent quarter from $292.3 million a year earlier, the company said April 23.
Revenue in Q1 at the less-than-truckload carrier fell 5.8% to $1.375 billion from $1.46 billion in the year-ago period. LTL revenue fell 5.9% year over year to $1.361 billion from $1.447 billion.
“Old Dominion’s financial results for the first quarter reflect the ongoing softness in the domestic economy. While we were encouraged to see signs of improving demand during the first quarter, there continues to be uncertainty with the economy,” said CEO Marty Freeman.
“The decrease in our first-quarter revenue was primarily due to a 6.3% decrease in LTL tons per day that was partially offset by an increase in LTL revenue per hundredweight. The decrease in LTL tons per day reflects a 5% decrease in LTL shipments per day and a 1.4% decrease in LTL weight per shipment,” he added.
ODFL’s LTL tons in Q1 totaled 2.087 million, down 7.8% from 2.264 million a year earlier. LTL tons per day fell 6.3% year on year to 33,135 from 35,380. The company’s LTL revenue per hundredweight rose 2.2% to $32.67 from $31.98.
“Our operating ratio increased by 190 basis points to 75.4% for the first quarter of 2025 as the decrease in revenue had a deleveraging effect on many of our operating expenses,” said Freeman.
ODFL posted an operating ratio of 75.4 in the quarter, compared with 73.5 a year earlier. Carriers’ OR provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance. ODFL typically posts the best LTL OR among publicly traded carriers.
“We entered this year with a degree of cautious optimism,” said Freeman, noting ODFL was encouraged by increasing demand. “That said, there continues to be uncertainty in the economy.”
Freeman said ODFL could not control the macroeconomic environment, so planned to focus on what it can control, particularly serving customers to the best of its abilities.
“As we win market share, density will improve, and therefore improve the operating ratio,” he said.
“We’ve not seen anything change from a big picture standpoint,” said Chief Financial Officer Adam Satterfield, but ODFL is planning ahead for when a rebound does take place, noting: “We’ve got to continue to work toward the other side.”
President Donald Trump threatened, imposed and then delayed higher levies on many countries' imports, particularly China, while the baseline tariffs of 10% on all U.S. imports remain in effect, leaving stock markets, consumer and business sentiment jittery.
As a result, planning has become more cautious.
“We were starting to see an acceleration in our business” in February and March, said Freeman, but he hopes the tariff uncertainty will be resolved quickly and therefore there will be a re-acceleration of freight market activity.
“If we see nearshoring in North America, that creates a tremendous opportunity for us,” said Freeman, with the demand from construction freight and fulfillment service centers.
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Still, LTL tonnage is down 10%-15% compared with 2021 and with any freight recovery delayed, ODFL is deferring previously expected service center and rolling stock expenditure.
ODFL expects its aggregate capital expenditure in 2025 to total approximately $450 million, down $125 million or 21.7% compared with prior expectations, the company said.
This total now includes planned expenditures of $210 million for real estate and service center expansion projects; $190 million for tractors and trailers; and $50 million for information technology and other assets.
ODFL’s real estate portfolio is operating at 30% capacity following the downturn, executives said, explaining the capex deferral. Growth could rebound later this year, which would increase capacity utilization, they added.
The carrier’s capital expenditure through the down cycle has not wavered, with $1.5 billion spent over the past two fiscal years, said Satterfield.
ODFL ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 2 among LTL carriers.
