Coming off a year in which Old Dominion Freight Line Inc. grew its top line by nearly one third and its workforce by 20%, President and CEO Greg Gantt and his team are raising the bar for 2022.
North Carolina-based ODFL posted a fourth-quarter profit of $279 million on revenue of $1.41 billion compared to $190 million and $1.07 billion, respectively, in the last three months of 2020. Less-than-truckload shipments per day climbed more than 17% while revenue per hundredweight rose 16%. The company’s operating ratio improved nearly three points to 73.6% during the quarter and finished 2021 at 73.5%. Full-year sales topped $5.2 billion versus $4 billion in 2020.
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In his company’s report and on a conference call with analysts and investors, Gantt and CFO Adam Satterfield said ODFL is on track for more market-share gains and profit growth this year. The fleet is the 13th largest carrier on the 2021 FleetOwner For-Hire 500.
Demand, led by the ecommerce and industrial sectors, shows little signs of waning, and the company’s investments in capacity in recent years—Satterfield pointed out ODFL has grown its doors count by more than half in the past decade—has it positioned to take advantage.
“Our success over the years has proven the flywheel effect of our strategic plan, and we believe it will spin even faster in 2022,” Gantt said.
ODFL added about 1,700 drivers to its ranks last year, and Gantt said he expects 2022 will be “another big recruiting year.” The plan is to pair that with greater capital spending, which came in at $550 million in 2021 and is set to grow to $825 million this year. That will include $485 million for tractors and trailers—a number Gantt said would be bigger but for supply chain issues at manufacturers—as well $300 million for real estate and service center expansion projects.
“There's a lot of investment that goes into continuing to take advantage of the market share opportunities that we feel are out there,” Satterfield said. “We're not going to give a specific goal for what we think we can do in 2022, but, but certainly the focus will be to produce as much profitable growth as we can.”
Investors liked the look of ODFL’s fourth-quarter numbers, which included word of a 50% dividend hike. Shares of the company (Ticker: ODFL) climbed nearly 6% on Feb. 2 and were up another 2.4% to about $332 in midday trading on Feb. 3. Over the past six months, they have risen more than 20%, growing the company’s market capitalization to $38 billion.
Most analysts following the company see the stock climbing a bit more: At Wells Fargo, for example, Allison Poliniak Cusic has lifted her target to $348 from $335 while Chris Wetherbee at Citi has raised his target to $350 from $340.
