Old Dominion surges on upbeat quarterly, full-year views

Stifel Nicolaus analyst David Ross noted that pricing for Old Dominion and other less-than-truckload, or short-haul, truckers has stabilized as more carriers go out of business or cut capacity.

The Associated Press

7/17/2008

NEW YORK — Shares of Old Dominion Freight Line Inc. soared Wednesday after the trucking company said improving tonnage, stable pricing and improving productivity would drive its second-quarter profit above Wall Street’s expectations.

The price of oil, dwindling for a second day, also sent shares up across the transportation sector. Light, sweet crude for August delivery fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, after earlier sinking as low as $132. A day earlier, prices posted their biggest one-day drop in dollar terms since the Gulf War.

Old Dominion forecasts earnings of 62 cents to 64 cents per share. Analysts predict 51 cents per share, according to Thomson Financial.

Old Dominion also raised its full-year profit expectation to between $1.90 and $1.95 per share, compared with a previous expectation of $1.85 to $1.90 per share. Wall Street projects full-year earnings of $1.83 per share.

The company is expected to release second-quarter results on July 24.

Stifel Nicolaus analyst David Ross raised his second-quarter and full-year estimates for the company, and reiterated his “Buy” rating and his $36 price target.

He noted that pricing for Old Dominion and other less-than-truckload, or short-haul, truckers has stabilized as more carriers go out of business or cut capacity.

Ross warned, though, that pricing should still remain competitive for the rest of the year as supply still outpaces demand.

Wachovia Capital Markets Justin B. Yagerman echoed the sentiment, saying that despite near-term optimism, he remains “cautious about second-half freight demand.”

Shares of Old Dominion surged $6.73, or 23.8 percent, to close at $35.03 Wednesday. The stock hit a new 52-week high of $35.44 earlier in the session, breezing past its prior peak of $33.62.