Old Dominion Freight Line Inc. (ODFL, Financial) filed Quarterly Report for the period ended 2010-03-31.
Old Dominion Freight Line Inc. has a market cap of $1.32 billion; its shares were traded at around $35.29 with a P/E ratio of 33.9 and P/S ratio of 1.1. Old Dominion Freight Line Inc. had an annual average earning growth of 15.4% over the past 10 years. GuruFocus rated Old Dominion Freight Line Inc. the business predictability rank of 4.5-star.ODFL is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Revenue per hundredweight increased 2.1% to $12.84 in the first quarter of 2010 from $12.57 in the same period of 2009. The increase in our revenue per hundredweight for the first quarter of 2010 reflects an increase in fuel surcharge revenue partially offset by the overall unfavorable impact on this metric caused by changes in the weight, length of haul and other characteristics of our freight. Fuel surcharge revenue increased to 11.6% of revenue from 8.3% in the first quarter of 2009 as a result of an increase in the average price of diesel fuel. Revenue per hundredweight, excluding fuel surcharges, decreased 1.5% from the first quarter of 2009 primarily due to changes in the characteristics of our freight. In contrast, our revenue per shipment, excluding fuel surcharges, increased 4.1% from the comparable period.
Salaries, wages and benefits decreased to 56.9% of revenue for the first quarter of 2010 from 59.9% for the first quarter of 2009. The decrease, as a percent of revenue, primarily resulted from our salaries, wages and benefits increasing $4.1 million, or 2.3%, as compared to the prior-year quarter despite the 7.7% increase in revenue. Although tonnage increased 5.8%, our shipment count remained relatively consistent allowing us to efficiently handle the increased volume. We achieved this primarily through the increased productivity of our employees, as there was a 4.6% reduction in the total number of full-time employees from March 31, 2009 to March 31, 2010. Despite the reduction in the number of full-time employees, the $4.1 million increase in salaries, wages and benefits from the comparable quarter was due to an increase in performance-based pay associated with the increase in income before taxes, an increase in hours worked and scheduled wage increases provided to our driver and platform workers hired within the past three years as they gained experience. In addition, there was an increase in employee benefit costs to 35.1% of salaries and wages from 34.7% in the first quarter of 2009.
Operating supplies and expenses increased to 16.5% of revenue for the first quarter of 2010 from 13.8% for the first quarter of 2009. The increase is primarily due to an $11.2 million increase in our diesel fuel costs, excluding fuel taxes, which is the largest component of operating supplies and expenses. The increase in our diesel fuel costs is primarily the result of a 34.8% increase in our average price per gallon as compared to the first quarter of 2009. In addition, there was a 2.3% increase in gallons consumed as compared to the prior-year quarter. We do not use diesel fuel hedging instruments and are therefore subject to market price fluctuations.
The decrease in insurance and claims expense to 1.7% of revenue from 2.3% of revenue in the first quarter of 2009 is primarily attributable to the 52.9% decrease in cargo claims expense. In the first quarter of 2010, our cargo claims ratio continued to improve from the historically low levels we experienced in 2009 and total claims paid were approximately $1.4 million, or 44.4% less than the same period of 2009. We believe this improvement was the result of our continued focus on claims prevention through our ongoing investment in certain equipment and materials that help minimize claims, the continued training of our employees and the success of our safety program in reducing our accident frequency ratio.
Our effective tax rate was 40.0% for the first quarter of 2010 as compared to 39.3% for the prior-year quarter, which benefited from the alternative fuel tax credits for the use of propane in our operations that expired on December 31, 2009. The effective tax rate exceeded the federal statutory rate of 35.0% primarily due to the impact of state taxes and, to a lesser extent, certain non-deductible items.
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Old Dominion Freight Line Inc. has a market cap of $1.32 billion; its shares were traded at around $35.29 with a P/E ratio of 33.9 and P/S ratio of 1.1. Old Dominion Freight Line Inc. had an annual average earning growth of 15.4% over the past 10 years. GuruFocus rated Old Dominion Freight Line Inc. the business predictability rank of 4.5-star.ODFL is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We achieved the increases in tonnage and revenue in the first quarter of 2010 without changing our pricing philosophy. In addition, we improved the productivity of our operations and aggressively managed our variable costs. Our linehaul laden load average, P&D stops per hour and platform pounds per hour improved by 0.9%, 1.3% and 3.2%, respectively. Our first quarter of 2010 results also reflect a $2.1 million reduction in our depreciation and amortization expenses due to changes in the estimated useful lives and salvage values of certain equipment. As a result of all of these factors, our operating ratio decreased to 94.8% from 96.6% for the prior-year quarter and net income increased 93.8% to $7.7 million for the first quarter of 2010.Revenue per hundredweight increased 2.1% to $12.84 in the first quarter of 2010 from $12.57 in the same period of 2009. The increase in our revenue per hundredweight for the first quarter of 2010 reflects an increase in fuel surcharge revenue partially offset by the overall unfavorable impact on this metric caused by changes in the weight, length of haul and other characteristics of our freight. Fuel surcharge revenue increased to 11.6% of revenue from 8.3% in the first quarter of 2009 as a result of an increase in the average price of diesel fuel. Revenue per hundredweight, excluding fuel surcharges, decreased 1.5% from the first quarter of 2009 primarily due to changes in the characteristics of our freight. In contrast, our revenue per shipment, excluding fuel surcharges, increased 4.1% from the comparable period.
Salaries, wages and benefits decreased to 56.9% of revenue for the first quarter of 2010 from 59.9% for the first quarter of 2009. The decrease, as a percent of revenue, primarily resulted from our salaries, wages and benefits increasing $4.1 million, or 2.3%, as compared to the prior-year quarter despite the 7.7% increase in revenue. Although tonnage increased 5.8%, our shipment count remained relatively consistent allowing us to efficiently handle the increased volume. We achieved this primarily through the increased productivity of our employees, as there was a 4.6% reduction in the total number of full-time employees from March 31, 2009 to March 31, 2010. Despite the reduction in the number of full-time employees, the $4.1 million increase in salaries, wages and benefits from the comparable quarter was due to an increase in performance-based pay associated with the increase in income before taxes, an increase in hours worked and scheduled wage increases provided to our driver and platform workers hired within the past three years as they gained experience. In addition, there was an increase in employee benefit costs to 35.1% of salaries and wages from 34.7% in the first quarter of 2009.
Operating supplies and expenses increased to 16.5% of revenue for the first quarter of 2010 from 13.8% for the first quarter of 2009. The increase is primarily due to an $11.2 million increase in our diesel fuel costs, excluding fuel taxes, which is the largest component of operating supplies and expenses. The increase in our diesel fuel costs is primarily the result of a 34.8% increase in our average price per gallon as compared to the first quarter of 2009. In addition, there was a 2.3% increase in gallons consumed as compared to the prior-year quarter. We do not use diesel fuel hedging instruments and are therefore subject to market price fluctuations.
The decrease in insurance and claims expense to 1.7% of revenue from 2.3% of revenue in the first quarter of 2009 is primarily attributable to the 52.9% decrease in cargo claims expense. In the first quarter of 2010, our cargo claims ratio continued to improve from the historically low levels we experienced in 2009 and total claims paid were approximately $1.4 million, or 44.4% less than the same period of 2009. We believe this improvement was the result of our continued focus on claims prevention through our ongoing investment in certain equipment and materials that help minimize claims, the continued training of our employees and the success of our safety program in reducing our accident frequency ratio.
Our effective tax rate was 40.0% for the first quarter of 2010 as compared to 39.3% for the prior-year quarter, which benefited from the alternative fuel tax credits for the use of propane in our operations that expired on December 31, 2009. The effective tax rate exceeded the federal statutory rate of 35.0% primarily due to the impact of state taxes and, to a lesser extent, certain non-deductible items.
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