Freight Line News for Investor

Since coverage Q1 earnings ultimately month, less-than-truckload weight (LTL) driver Old Dominion State Freight Line (ODFL) shares have stomped the gas, and hurried ahead 12-tone system already. This week, the corporate created Associate in Nursing announcement that looks probably to stay Old Dominion State driving ahead.

In April, Old Dominion State happy investors with the news that its revenues had fully grown V-day year over year -- albeit the particular profits on those revenues lagged behind slightly (up solely thirteen year over year). whereas profits did not grow quite as quickly in concert may need hoped, though, revenues for the quarter still hit record levels -- "the highest quarterly revenue that we've ever made," as chief executive officer David Congdon place it at the time.

Congdon additionally secure investors additional excellent news to come back, inasmuch as he commented: "Revenue growth accelerated throughout the quarter, and our momentum has continued so far into April." Now, it looks Old Dominion State is delivering thereon promise.

Promise delivered
On Tuesday, Old Dominion State noted that up to now this quarter, the burden in a lot of product shipped per day in April was up fourteen.1% (over April 2013 levels), followed by a could increase of fourteen.5% (also year over year). each these numbers lead management to believe that total growth for the financial second quarter can vary somewhere between 14 July and fourteen.5%.

Even higher, the revenues that Old Dominion State is ready to gather on shipments is growing quicker than the dimensions of the shipments. "Revenue per hundredweight" is believed to possess inflated anyplace from third to three.5% compared to last year -- a larger increase than was antecedently expected.

Put otherwise, Old Dominion State is shipping additional boxes and charging additional for every box shipped. unnecessary to mention, this augurs well for each revenue and profits growth in Q2. Analysts WHO ar positing $686 million in revenues for Q2, and $0.80 per share in profits (according to information from S&P Capital IQ) could also be pleasantly stunned once the particular numbers start off in July. what is additional, Congdon noted Tues that the corporate is experiencing "ongoing growth in... market share," because it competes with rivals within the LTL market.

What it means that to investors
All of this -- the optimistic steerage, and therefore the more moderen confirmation of that optimism -- helps to elucidate why analysts assume Old Dominion State can grow its profits nineteen this year, V-day additional next year, and average annual profits growth of nearly nineteen over future 5 years. It explains, too, why investors ar presently gayly paying nearly twenty six times earnings to have shares of Old Dominion State stock.

It doesn't, however, essentially mean that they're right to try and do therefore.

Even nineteen profits growth, keep in mind -- and with earnings growth expected to slow in 2015, even this variety looks doubtful -- might not be enough to justify paying a 26-times multiple to earnings for this stock. to boot, Old Dominion State generates a lot of less free income from its business (just $38 million over the past year) than it reports as "net income" below accumulation ($211 for constant period). this means that the corporate might not even be as profitable Associate in Nursing operation as meets the attention.

Long story short, business seems to be booming at Old Dominion State Freight Line -- as so it seems to be booming at several of its rivals. however a decent business doesn't essentially mean the stock is additionally a decent purchase. Caveat capitalist.

Freight Line News for Investor 2014-06-26T22:26:00-07:00 Rating: 4.5 By: Admin