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One major repercussion of the COVID-19 pandemic for Old Dominion Freight Line Inc., based in Thomasville, has been a 10% cut to its workforce since mid-March, when the rapidly growing outbreak began to hurt businesses.

A COVID-19 pandemic-related decline in customer shipping contributed to Old Dominion Freight Line Inc. having a 15.1% decline in second-quarter net income, to $147.8 million.

Another pivotal COVID-19 consequence: a 10% decline in its companywide workforce since the start of the pandemic in mid-March.

Diluted earnings were down 19 cents, to $1.25 a share.

The average earnings forecast was $1.04 by seven analysts surveyed by Zacks Investment Research. Analysts do not include one-time gains and charges in their forecasts.

On April 24, Old Dominion, based in Thomasville, confirmed that a COVID-19 pandemic-related decline in business led “to a necessary adjustment to our workforce.”

The company declined to say at that time how many employees were affected by furloughs, the length of the furloughs or how long the cutbacks were projected to last.

Adam Satterfield, Old Dominion’s chief financial officer, told analysts in April that “due to the unprecedented decrease in revenue we experienced in April, we implemented the furlough program in attempt to balance the number of employees actively working with current freight trends.”

On Thursday, the company listed having, on average, 17,911 employees during the second quarter, down 10% from 19,948 in the first quarter and down 13.6% from 20,735 in the year-ago period. That was the only mention of workforce count in the company’s formal news release.

As of Dec. 31, 2019, Old Dominion had 910 employees at its headquarters in Thomasville and 720 workers at a service center in southwest Greensboro. The company is expanding its Greensboro center and establishing a similar center in the Guilford County side of Kernersville.

Satterfield told analysts Thursday that “we brought many people back from the furlough program.”

“We’re down about 1,400 positions overall” now compared with March, he said.

Satterfield said the company’s department heads are “going through evaluating their costs, and costs don’t save themselves. It takes action and a plan, and we’ve figured out ways to be able to do more with less.”

“If our accelerating trends continue, we certainly will have to continue to bring back some more employees with increased volumes.”

Old Dominion, a bellwether for the U.S. economy as a top-10 trucking company, warned on June 3 that it had experienced a sharp shipping and revenue decline for May.

Revenue for the quarter fell 15.5% year-over-year to $896.2 million.

“The second quarter was one of the most difficult periods we have experienced, although our team responded quickly to efficiently manage our operations in this environment,” Greg Gantt, the company’s chief executive and president, said in a statement.

“Given the circumstances with the domestic economy, the decrease in our quarterly revenue was not entirely unexpected. Our overall financial results for the quarter were solid, however, as we continued to execute on the basic elements of our long-term strategic plan.”

CFRA analyst Colin Scarola responded to the Old Dominion earnings performance by raising his 12-month share-price target by $4 to $114 and his fiscal 2020 earnings projection from $4.29 to $5 a share.

"Old Dominion's actual business is not immune to recessions. Shipment volume dropped 17% YoY, as the COVID-19 reduces demand for consumer and industrial freight service," Scarola said. "Through July, volume has recovered considerably from April lows.

"We see the on-going pandemic keeping its freight demand below 2019 levels through 2021, especially iffederal unemployment stimulus tapers, weakening consumer spending.

"This puts Old Dominion at material risk of missing rapid growth forecasts," Scarola said.

Old Dominion has trucked on with a new share-purchase program when most corporations have suspended such initiatives for the short term, if not all of fiscal 2020.

The board of directors approved on May 1 a two-year program authorizing the repurchase of up to $700 million of outstanding common stock.

The company said Thursday that it spent $306.8 million on stock repurchases during the first half of fiscal 2020, including $128.5 million in the second quarter.

A company typically conducts a stock buyback to reduce the number of shares available, thus making the remaining shares more valuable.

Companies also buy back shares when they believe the shares are undervalued.

The new share-repurchase commitment came after Old Dominion completed March 24 a3-for-2 stock split. Analysts say stock splits that produce more shares typically represent a company’s vote of confidence in future revenues.

A major part of Old Dominion’s success has been its focus on reinvesting in equipment, technology and acquisitions.

The company said it spent $67.9 million on capital expenditures during the second quarter.

It maintained projections of spending $265 million in fiscal 2020: $195 million for real estate and service center expansion projects, $20 million for tractors and trailers, and $50 million for information technology and other assets.

rcraver@wsjournal.com

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@rcraverWSJ

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