Old Dominion Freight Line Announces Q4 2024 Earnings: $1.23 Per Diluted Share
Old Dominion Freight Line, Inc. (Nasdaq: ODFL), a leading less-than-truckload (LTL) freight carrier, has released its financial results for the three-month and twelve-month periods ending December 31, 2024. The company’s performance reflects the impact of a softening domestic economy while showcasing resilience in operational efficiency and customer service. All prior-period share and per-share data have been adjusted to reflect the Company’s March 2024 two-for-one stock split.
Key Financial Highlights
For the fourth quarter of 2024, Old Dominion reported total revenue of $1.386 billion, representing a 7.3% decline compared to the same period in 2023. For the full year, total revenue was $5.815 billion, a modest decrease of 0.9% from 2023.
The decline in revenue was primarily driven by an 8.2% drop in LTL tons per day during the quarter. This reduction stemmed from a 7.6% decrease in daily LTL shipments and a 0.7% decline in average LTL weight per shipment. Despite these challenges, the company achieved a 3.8% increase in LTL revenue per hundredweight, excluding fuel surcharges, underscoring the success of its long-term yield management strategy.
Operating income for the quarter fell to $334.0 million, down 20.7% year-over-year, while the operating ratio increased by 410 basis points to 75.9%. For the full year, operating income decreased by 5.9% to $1.544 billion, with the operating ratio rising slightly to 73.4%.
Net income for the fourth quarter totaled $263.1 million, or $1.23 per diluted share, compared to $322.8 million, or $1.47 per diluted share, in the prior-year period. For the full year, net income declined by 4.3% to $1.186 billion, translating to $5.48 per diluted share versus $5.63 in 2023.
Operational Excellence Amid Economic Softness
Marty Freeman, President and Chief Executive Officer of Old Dominion Freight, highlighted the company’s ability to maintain operational excellence despite challenging economic conditions. “Old Dominion’s financial results for the fourth quarter reflect the ongoing softness in the domestic economy,” Freeman stated. “While our revenue declined 7.3% in the quarter, our market share remained relatively consistent. In addition, we continued to operate efficiently while maintaining our best-in-class service.”
Freeman emphasized that providing superior service at a fair price remains central to Old Dominion’s long-term strategic plan. During the quarter, the company achieved an impressive on-time service performance rate of 99% and maintained a cargo claims ratio below 0.1%, further solidifying its reputation as an industry leader.
The decline in LTL tons per day was attributed to reduced shipping volumes, which were partially offset by higher pricing. Excluding fuel surcharges, LTL revenue per hundredweight increased by 3.8%, reflecting the company’s disciplined approach to cost-based pricing. This strategy not only helps offset inflationary pressures but also supports ongoing investments in capacity expansion, technology upgrades, and employee development—key factors in sustaining market share growth over the long term.
Impact of Operating Expenses
The increase in the operating ratio to 75.9% for the quarter was largely due to the deleveraging effect of lower revenue on fixed costs. Miscellaneous expenses as a percentage of revenue rose by 110 basis points, primarily because of lower gains recorded from the disposal of property and equipment. Additionally, insurance and claims expenses increased by 100 basis points as a percentage of revenue, driven by adjustments following the annual third-party actuarial review of accident claims.
Despite these challenges, Old Dominion Freight demonstrated strong cost management and operational discipline. The company’s focus on efficiency and service quality enabled it to navigate the economic downturn while continuing to deliver value to customers and shareholders.
Cash Flow and Capital Allocation
Old Dominion generated robust cash flow from operations, totaling $401.1 million in the fourth quarter and $1.7 billion for the full year. As of December 31, 2024, the company held $108.7 million in cash and cash equivalents.
Capital expenditures for the quarter amounted to $170.9 million, bringing the annual total to $771.3 million. Looking ahead to 2025, the company expects aggregate capital expenditures of approximately $575 million. Planned allocations include $300 million for real estate and service center expansion projects, $225 million for tractors and trailers, and $50 million for information technology and other assets.
In line with its commitment to returning capital to shareholders, Old Dominion Freight repurchased $967.3 million worth of shares during the year, including a $200 million accelerated share repurchase agreement settled in the fourth quarter. The company also paid $223.6 million in cash dividends.
Increased Quarterly Cash Dividend
In a move to reward shareholders, the company’s Board of Directors declared a first-quarter dividend of $0.28 per share, payable on March 19, 2025, to shareholders of record as of March 5, 2025. After adjusting for the March 2024 two-for-one stock split, this represents a 7.7% increase compared to the quarterly cash dividend paid in the first quarter of 2024.