Old Dominion Freight Line Reports 5.8% Revenue Decline in Q1 2025

Old Dominion Freight Line, Inc. reported a decline in financial performance for the first quarter of 2025, with revenue from operations totaling $1.375 billion, a decrease of 5.8% compared to $1.460 billion in the same period of 2024. The company's net income also fell by 12.9% to $254.7 million, down from $292.3 million year-over-year. Diluted earnings per share decreased to $1.19 from $1.34, reflecting the impact of reduced shipping volumes amid a softening domestic economy. The operating ratio, a key measure of profitability, increased to 75.4% from 73.5%, indicating higher operating expenses relative to revenue.

The decline in revenue was attributed to a decrease in LTL (less-than-truckload) tonnage, which fell by 7.8% to 2.1 million tons, and a 6.5% drop in LTL shipments. However, the company experienced a 2.2% increase in LTL revenue per hundredweight, which was partially offset by lower fuel surcharges due to a decrease in diesel prices. The company maintained a focus on operational efficiency, achieving a 99% on-time service rate and a cargo claims ratio below 0.1% during the quarter.

In terms of strategic developments, Old Dominion continued its stock repurchase program, having authorized up to $3.0 billion in share buybacks in July 2023. As of March 31, 2025, the company had $2.06 billion remaining under this program. The company also reported a reduction in capital expenditures for 2025, now estimated at $450 million, down from initial projections, reflecting a cautious approach in response to current economic conditions.

Operationally, the company reported a decrease in its average number of active full-time employees by 4.7%, which contributed to a reduction in salaries and wages. Despite the decrease in workforce, employee benefit costs increased, primarily due to higher health care expenses. The company’s cash and cash equivalents at the end of the quarter stood at $97.2 million, down from $108.7 million at the end of 2024, reflecting cash flows used in financing activities, including share repurchases and dividend payments.

Looking ahead, Old Dominion anticipates continued challenges in the domestic economy, which may impact shipping volumes. However, the company remains committed to its yield management strategy and operational efficiencies to support long-term growth. The management expects to navigate through the current economic environment while maintaining a focus on customer service and investment in technology and infrastructure to enhance operational capabilities.