Old Dominion Freight Line (NASDAQ:ODFL) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Old Dominion Freight Line Inc reported a 2.9% year-over-year decline in revenue for Q1 2026, totaling $1.33 billion, despite an improvement in LTL volumes later in the quarter.
The company maintained a 99% on-time service and a claims ratio below 0.1% while focusing on yield management to support strategic investments.
Old Dominion Freight Line Inc plans to invest $265 million in 2026, continuing its strategy to prepare for future growth and handle increased volumes.
The company’s operating ratio increased by 80 basis points to 76.2% due to higher overhead costs, though direct operating costs improved.
Management expressed confidence in market share growth, supported by a strong service proposition and continued investment in employee development and infrastructure.
April 2026 revenue per day showed improvement despite a 6.5% decrease in LTL tons per day, indicating potential for sequential growth in Q2.
Old Dominion Freight Line Inc highlighted its strategic focus on maintaining superior service and cost discipline, with expectations of benefiting from improved demand and market share gains.
Full Transcript
OPERATOR
Good day and welcome to the Old Dominion Freight Line Inc first quarter 2026 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Jack Atkins. Please go ahead.
Jack Atkins
Thank you, Dorwin. Good morning, everyone, and welcome to the first quarter 2026 conference call for Old Dominion Freight Line Inc. Today’s call is being recorded and will be available for replay beginning today and through April 29, 2026 by dialing 1-855-669-9658, access code 769-9494. The replay of the webcast may also be accessed for 30 days at the company’s website. This conference call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Old Dominion’s expected financial and operating performance. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward looking statements. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth in Old Dominion’s filings with the Securities and Exchange Commission and in this morning’s news release. Consequently, actual operations and results may differ materially from the results discussed in the forward looking statements. The Company undertakes no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise. Finally, before we begin, we note that we welcome your questions today, but ask that you limit yourselves to just one question at a time before returning to the queue. Thank you for your cooperation. At this time for opening remarks, I’d like to turn the conference call over to our President and Chief Executive Officer, Marty Freeman. Marty, please go ahead.
Marty Freeman (President and Chief Executive Officer)
Good morning and welcome to our first quarter conference call. With me on the call today is Adam Satterfield, our CFO. After some brief remarks, we will be glad to take your questions. Our first quarter results reflect a continuation of the encouraging trends that started to develop late last year. While our first quarter revenue declined on a year over year basis, demand for our service improved as the quarter progressed. This contributed to the acceleration in our LTL volumes during the quarter with strong sequential tonnage growth in February and March. Importantly, during the quarter, our team continued to deliver best in class service to our customers and maintained our disciplined approach to yield management. Providing our customers with superior service at a fair price is the cornerstone of our strategic plan. The consistency of our service performance day in and day out creates significant value for our customers and is something that we take significant pride in. As a result, we were pleased to once again deliver 99% on time service and a claims ratio below 0.1% in the first quarter. The strength of our unmatched value proposition has differentiated us from our competition and allowed us to win more market share than any other LTL carrier over the last 10 years. Our value proposition will continue to support our ability to grow our business in the years ahead and we continue to believe that we will be the biggest market share winner over the next 10 years. As a result, our best in class service also supports our yield management initiatives. Our long term disciplined approach to pricing is designed to offset our cost inflation and support our ability to make strategic investments back into our business. These investments will allow us to stay ahead of our anticipated growth curve to help us ensure that we’ll always have the capacity we need to grow. Our ability to say yes when a customer needs needs us the most is the hallmark of our industry. Leading customer service business levels in the LTL industry can change very quickly and being able to respond to growth opportunities in an improving demand environment is one of the primary areas that differentiate us from our competition. We believe it is important to consistently invest throughout the economic cycle despite the short term cost headwinds associated with this strategy. This is why despite a challenging operating environment, we invested nearly 2 billion capital expenditures over the past three years and why we plan to invest an additional 265 million in 2026. We’ve also continued to invest in the most important component of our long term success which is our OD family of employees. Our people and our unique culture are truly what sets us apart at Old Dominion. As a result, we have worked to ensure that we are providing a competitive wage and benefit package as well as various internal developmental programs like our in-house driver training schools and our management training program. These programs not only provide important opportunities for career advancements for our team, but they help ensure that our company is ready to respond when our customers need us the most. While we were always focused on long term, it is critical that we remain diligent in controlling our cost and continue to operate as efficiently as possible without compromising our superior service standards that remained the case in the first quarter as we continued to find ways to maximize our operating efficiencies and control our discretionary spending. We continue to believe that our business model contains significant operating leverage which has been enhanced by our ongoing investments in our technologies and continued focus on business process improvements. We produced solid results in the first quarter by continuing to execute our strategic plan, and I want to thank the entire OD family of employees for their unwavering dedication to our customers and to our company. Due to our consistent execution and investment, we are uniquely positioned to effectively handle incremental volume opportunities as the demand environment improves. As a result, we remain confident in our ability to win market share, generate profitable revenue growth, and increase shareholder value over the long term. Thank you very much for joining us this morning and now Adam will discuss our first quarter in greater detail.
Adam Satterfield (Chief Financial Officer)
Thank you Marty and good morning. I’m a little under the weather today, so I’d like to ask you all to bear with me as we get through this call Old Dominion’s revenue totals $1.33 billion dollars for the first quarter 2026, which represents a 2.9% decrease from the prior year. Our revenue Results include a 7.7% decrease in LTL tons per day that was partially offset by a 5.7% increase in our LTL revenue per hundredweight. Excluding fuel surcharges, our LTL revenue per hundredweight increased 4.4% compared to the first quarter 2025, which reflects our long term disciplined approach to yield management. On a sequential basis, our revenue per day for the first quarter increased 0.5% when compared to the fourth quarter of 2025 with LTL tons per day decreasing 0.4% and LTL shipments per day decreasing 0.7%. For comparison, the 10 year average sequential change for these metrics includes a decrease of 2.8% in revenue per day, a decrease of 2.5% in LTL times per day, and a decrease of 1.6% in LTL shipments per day. The monthly sequential changes in LTL tons per day during the first quarter were as January decreased 3.4% as compared to December, February increased 4.9% as compared to January, and March increased 4.6% as compared to February. The comparative 10 year average change for these respective months is a decrease of 3.1% in January, an increase of 1.0% in February and an increase of 4.5% in March. While there are still a couple of workdays remaining in April, our month to date revenue per day has increased by approximately 7.0% when compared to April 2025. This includes a decrease in our LTL tons per day of approximately 6.5% and an increase in our revenue per hundredweight excluding fuel surcharges of 4 to 4.5%. As usual, we will provide the actual revenue related details for April in our first quarter form 10-Q. Our operating ratio increased 80 basis points to 76.2% for the first quarter 2026 as the increase in overhead cost as a percent of revenue more than offset the improvement in our direct cost. Our overhead cost increased as a percent of revenue primarily due to the deleveraging effect associated with the decrease in our revenue as well as an increase in our general supplies and expenses. This resulted in the 60 basis point increase in our general supplies and expenses and 40 basis point increase in our depreciation cost as a percent of revenue. All of our other combined costs improved as a percent of revenue for the quarter on a net basis. The improvement in our direct operating cost as a percent of revenue was primarily due to our continued focus on revenue quality and operating efficiencies despite the lack of density on our network associated with the decrease in our volumes. Our team did a nice job of matching our labor costs with current revenue trends and this will be a key focus for us over the balance of the year. That said, we currently believe we have an appropriately sized workforce to handle a sequential increase in volumes during the second quarter. Old Dominion’s cash flows from operations totaled $373.6 million for the first quarter and capital expenditures were $62.6 million. We utilized $88.1 million for our share repurchase program during the first quarter and our cash dividends totaled $60.5 million. Our effective tax rate for the first quarter 2026 was 25.0% as compared to 24.8% in the first quarter 2025. We currently expect our effective tax rate to be 25.0% for the second quarter of 2026. This concludes our prepared remarks this morning. Operator will be happy to open the floor for questions at this time.
OPERATOR
We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jordan Aliger with Goldman Sachs.
Jordan Aliger (Equity Analyst)
Please Go ahead. Yeah, hi, morning everyone. Thanks for the update. I guess sort of in the context of, you know, some of those trends you’ve been seeing, maybe continue on the trend thought and share some color or thoughts on direction of or trends as we move from the Q1 to Q2. Thank you.
Adam Satterfield (Chief Financial Officer)
Yeah, the 10 year average change for the operating ratio is 300 to 350 basis point improvement from the first to the second quarter and we’re comfortable with that range in the second quarter this year. Assuming that we do see some sequential improvement our volumes from here. And that’s what we’d anticipate. But obviously there’s a lot going on in the world right now. But based on what we’re currently seeing, we’re expecting that increase in volumes and I think we’re comfortable with hitting that normal sequential range as a result. If we do so, that’d be the fourth straight quarter that we’ve been able to be in or at least beat what our normal sequential change would be.
Jordan Aliger (Equity Analyst)
Thanks. And I don’t know if I could ask a follow up, but just sort of related to that, have you seen been a shift in sort of that excess terminal capacity? Has it come in a little bit? As we’ve seen volumes look a little better in terms of our capacity?
Adam Satterfield (Chief Financial Officer)
Yeah, I think you’ve been at like 30, 35% terminal capacity excess. I’m just sort of curious if that’s changed at all. Yeah, we’re, we’re still a little north of 35%. Their volumes are still down on a year over year basis. And obviously this is the slower time of the year in the first quarter. But you know, that’s something that we continue to see as an opportunity and will drive. Part of that operating ratio improvement is we can continue to see sequential volume improvement and then leveraging, you know, those fixed costs, those investments that we’ve made and that depreciation headwind that we’ve been facing. So leveraging those and some of our other fixed overhead costs. But you know, that benefit of density driving improvement in both our direct operating cost as well as some of those overhead costs. Thank you.
OPERATOR
The next question is from Jason Seidel with TD Cowan.
Jason Seidel (Equity Analyst)
Please go ahead. Thanks, operator. Morning, Marty. Adam and Jack. And Adam, I hope you feel better. I’m going to stick on the OR topic a little bit here. You know, as we think about your commentary for the normalized sequential moves from 1Q to 2Q, can you help us frame up the impacts in 1Q for
Adam Satterfield (Chief Financial Officer)
both fuel as well as weather? So we could figure out sort of where in the range we might want to be. Yeah, the. Glad you asked that. Figured fuel would be a topic of conversation, but it’s come up a few times. Yeah, exactly. You know, fuel is part of our yield management strategy we’ve always talked about we want fuel, which is just a variable component of pricing, to really be indifferent if fuel goes up or if it goes down. You know, essentially we want the bottom line to be the same and that’s how we look at things on individual account profitability type basis. And I think when you look at what happened from the fourth quarter to the first quarter of this year, we outgrew our normal sequential trend with tonnage by about 200 basis points. And that’s really the story of the quarter in the sense of the strong operating ratio performance that we had there. But when you just look, our shipments per day from the fourth quarter to the first quarter were essentially the same. And when you look at fuel was, was up 10%, deal counts, consistent profitability is relatively consistent, a little bit better overall, but obviously there’s other things going on. And when I compare that back to the first quarter of 2023 compared to the second quarter 2023, a lot of similar circumstances. Bill count was the same between those two periods. Fuel was down 10% between those two periods, but. So you had revenue impact on the downside of fuel, but profitability was consistent between those two periods. So obviously there’s always a lot of fluctuations. But I think those two sequential periods, when you’ve got similar bill count, similar mix of freight, kind of shows that fuel can go up or down 10% and overall profitability stay the same. Now, obviously we’re looking at a much larger increase in fuel and I would probably just point everybody back to the second quarter 2022. I think this first quarter to second quarter of 26 is probably going to have a lot of similarities to that first quarter to second quarter 22 period when we saw the fuel shock and all the other inflationary impact that that drives. That’s very helpful.
OPERATOR
And that was my one. Appreciate it, guys. The next question is from Chris Weatherby with Wells Fargo.
Chris Weatherby (Equity Analyst)
Please go ahead. Hey, thanks guys. Good morning. Wanted to get your sense on how you feel about, I guess, demand and then ultimately how you’re faring from a market share perspective as you think about coming out of the really strong performance in February and then what you’ve seen so far in March and April. Just kind of curious if some improvement has continued or you feel like there’s
Adam Satterfield (Chief Financial Officer)
been more Steady demand, just kind of get a sense of how you’re thinking about things. Yeah, it definitely feels like it’s continued to improve and go back to last year. We’ve had essentially through March is five months of normal sequential trends for us. And obviously like I mentioned earlier, it’s through a slower part of the year. But we felt like we started seeing a lot of and hearing optimism from customers and from our sales team late last year and we started seeing that return to seasonality. We’ve seen a pickup in our wait for shipment and in fact in April our weight for shipment is up on a year over year basis a little over 1%. So you know, that’s usually a leading indicator of an improving demand environment. So all those things, the positive ISM trends that we’ve seen and we’d expect another positive ism for April, I think those have all been consistent. The retail side of the sector has probably been driving more the volume performance at this point and we’re looking for the industrial sector to start contributing as well. That usually starts performing on a lag basis after you see that positive ISM performance. And I think that what we seem to hear right now, obviously there’s some geopolitical risk to everything right now, but it seems …
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