Old Dominion Freight Line (NASDAQ: ODFL) reported Q2 EPS of $1.25, $0.17 better than the analyst estimate of $1.08. Revenue for the quarter came in at $896.21 million versus the consensus estimate of $897.39 million.

Greg C. Gantt, President and Chief Executive Officer of Old Dominion, commented, “The second quarter of 2020 was one of the most difficult periods we have experienced, although our team responded quickly to efficiently manage our operations in this environment. Given the circumstances with the domestic economy, the decrease in our quarterly revenue was not entirely unexpected. Our overall financial results for the quarter were solid, however, as we continued to execute on the basic elements of our long-term strategic plan. We improved our industry-leading service metrics that support our revenue quality initiatives, and we also balanced our operating costs with the decrease in volumes. We believe the current environment has increased the importance of superior customer service, and we were proud to establish a new Company-record quarterly cargo claims ratio of 0.1% while maintaining our on-time deliveries at 99% during the second quarter.

“The decrease in revenue as compared to the second quarter of 2019 was primarily due to a 12.1% decrease in LTL tons per day and a 3.8% decrease in LTL revenue per hundredweight. Revenue per hundredweight was negatively affected by the significant decline in the average price of diesel fuel and the 5.3% increase in our average weight per shipment, which generally has the effect of reducing revenue per hundredweight. Excluding fuel surcharges, LTL revenue per hundredweight decreased 0.5% over the same period of the prior year. While our yield metrics were negatively affected by changes in the mix of our freight during the second quarter, our underlying pricing performance remained consistent with prior periods. We intend to maintain our long-term and consistent approach to pricing, as we believe this approach supports our ability to achieve long-term profitable growth.

“Our revenue per day decreased significantly in April 2020 due primarily to the stay-at-home and similar orders issued throughout the country. As these stay-at-home mandates were phased out and our customers began to reopen their businesses, our revenue trend improved on a sequential basis for the remaining months of the quarter. Although year-over-year volumes decreased for both May and June when compared to the same periods of 2019, we were encouraged by the sequential improvement in our volumes that has also continued into July.

“Our operating ratio improved slightly to 77.8% from 77.9% for the second quarter of 2019 due primarily to the quality of our revenue and increased efficiency in our operations, which allowed us to improve our direct operating costs as a percent of revenue. This improvement in our direct costs more than offset the increase in overhead costs as a percent of revenue. We attribute the increase in our overhead costs as a percent of revenue to the deleveraging effect associated with the reduction in revenue, despite our diligence in controlling our discretionary spending. While we were pleased with the improvement in our operating ratio during the quarter, we were careful to balance short-term cost decisions in a challenging economic environment against the long-term needs of our business. As a result, our service advantage and available capacity position us to capitalize on future revenue growth opportunities.”

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