Old Dominion Freight Line Inc. (NASDAQ:ODFL) stock fell Wednesday despite the trucking company reporting better-than-expected third-quarter 2026 results and issuing a fourth-quarter revenue forecast above Wall Street expectations.
The results showed stronger pricing and improving freight demand in September, although overall third-quarter less-than-truckload (LTL) tonnage remained slightly lower year over year.
The company reported earnings of $1.65 per share, up 28.9% year over year and beating analysts’ consensus estimate of $1.61.
Revenue rose 13.1% to $1.591 billion, topping the consensus estimate of $1.561 billion.
Earnings and Operating Performance
Old Dominion’s operating ratio improved 280 basis points to 71.5%, reflecting lower direct operating costs and overhead as a percentage of revenue.
Operating cash flow totaled $469.5 million in the quarter, while capital expenditures reached $67.1 million.
The company repurchased $160.9 million in shares and paid $60 million in dividends during the quarter.
Freight Demand Shows Signs of Recovery
Revenue growth was primarily driven by stronger pricing, with LTL revenue per hundredweight increasing approximately 13% year over year.
However, LTL tons per day declined 0.1% during the quarter, highlighting continued softness in overall freight volumes.
Demand improved in September, with LTL tons per day rising 1.6% year over year.
Sequentially, third-quarter revenue per day increased 2.4%, while LTL tons per day rose 1.2% and shipments per day climbed 2.4% from the second quarter.
Monthly tonnage declined 0.5% in July and 1.6% in August before rebounding 3.9% in September.
The momentum continued into October, with month-to-date revenue per day rising approximately 22% year over year, supported by a 1.6% increase in LTL tons per day and higher pricing.
Despite improving demand, Old Dominion cautioned that inflation and concerns about consumer spending continue to hold back a broader freight recovery.
Management said easing fuel costs could help alleviate shippers’ concerns about consumer demand and pave the way for significantly stronger freight growth.
Fourth-Quarter Revenue Forecast Tops Estimates
Old Dominion expects fourth-quarter revenue of $1.54 billion to $1.58 billion, above analysts’ consensus estimate of $1.49 billion.
The forecast reflects continued pricing strength and improving freight demand, with management anticipating better-than-typical seasonal performance.
The company said it has sufficient capacity and resources to accommodate additional freight volumes and capitalize on growth opportunities.
ODFL Price Action: Old Dominion Freight Line shares were down 5.31% at $177.10 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock