Old Dominion execs cross their fingers for a return of the ‘reacceleration’ of early this year
Executives of Old Dominion Freight Line are clinging to silver linings they saw in the freight market early this year and a hint of stability they’ve seen since President Donald Trump announced a barrage of tariffs on April 2.
North Carolina-based Old Dominion—No. 10 on the FleetOwner 500 list of largest U.S. for-hire carriers—reported first-quarter net profits of $255 million on total revenue of $1.37 billion; those figures were down 13% and 6%, respectively, from the same period of last year. Underpinning the drop in profits was a 6.3% decline in less-than-truckload tons per day during the quarter, with the majority of that decrease attributed to fewer shipments.
President and CEO Marty Freeman said continued softness in the U.S. economy weighed on results and added that the uncertainty due to tariffs means “a full recovery in our business trends might take additional time.” And CFO Adam Satterfield said he has no illusions that customers pulling back on investments because of uncertainty will hurt freight volumes.
And yet…
Freeman and Satterfield detailed that Old Dominion teams saw encouraging signs of a “reacceleration” in demand during February and March. Both months, they said, performed according to traditional seasonal patterns. And while Satterfield acknowledged that some of that activity might have been customers pulling forward spending to beat tariff hikes, he added that April activity has “come back pretty consistently with what we would expect.”
“Hopefully, once [April’s uncertainty] gets resolved, we’ll see the reacceleration in the macro environment that we were really hoping for and starting to see early signs of in the February and March trend,” he said.
In the meantime, the executives are trimming their capital spending plans—just as their peers at J.B. Hunt Transport Services Inc. said last week they will. After spending about $770 million on property, equipment, and technology in 2024, Freeman and Satterfield told investors in early February that number would fall to $575 million this year. Now, they say Old Dominion’s capex will be $450 million, breaking down as follows:
- $210 million will go to real estate and service center projects, down from $300 million
- $190 million to equipment versus $225 million a few months ago
- $50 million for other projects, which is unchanged from the prior forecast
Shares of Old Dominion (Ticker: ODFL) rose nearly 1% to $153 and change after the company’s leaders reported earnings. Over the past six months, however, they are still down nearly 20%, which has cut the company’s market capitalization to about $32.5 billion.
