Old Dominion Freight Line, a leading less-than-truckload (LTL) carrier, reported a 7% surge in its stock price during pre-market trading on Wednesday, following the company's better-than-expected fourth-quarter earnings results. Despite facing ongoing macroeconomic headwinds that led to a 7.3% year-over-year decline in revenue to $1.386 billion, ODFL's yield management strategies and operational excellence helped mitigate the impact on profitability.

For the fourth quarter of 2024, ODFL reported earnings per diluted share of $1.23, surpassing analysts' consensus estimate of $1.16. The company attributed the revenue decline to an 8.2% drop in LTL tons per day, reflecting the softness in the domestic economy and its impact on freight demand.

Despite the challenging environment, ODFL maintained its focus on providing superior service and maximizing operational efficiencies. The company achieved an impressive on-time service performance of 99% and a cargo claims ratio below 0.1% during the quarter. Additionally, ODFL's consistent cost-based approach to pricing helped offset inflationary pressures, with LTL revenue per hundredweight excluding fuel surcharges increasing by 3.8%.

ODFL's operating ratio, a key measure of profitability in the trucking industry, increased to 75.9% from 71.8% in the prior-year quarter, primarily due to the deleveraging effect of lower revenue on the company's operating expenses.

Looking ahead, ODFL remains optimistic about its long-term growth prospects and ability to capitalize on future economic recovery. The company announced a 7.7% increase in its quarterly cash dividend to $0.28 per share, reflecting its confidence in generating profitable growth and delivering shareholder value. ODFL plans to invest approximately $575 million in capital expenditures in 2025, focusing on service center expansion, fleet upgrades, and technology enhancements.