Shares of Old Dominion Freight Line (NASDAQ: ODFL) were falling today in sympathy with a disappointing report from rival Saia, another top less-than-truckload (LTL) carrier.

Combined with the report from ODFL the day before, Saia's update is clear evidence that the trade war and weakening economy is already having an effect on the trucking sector.

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As of 11:58 a.m. ET, Old Dominion stock was down 6.7%, while Saia stock had plunged 29.1%.

Image source: Getty Images.

Trucking demand is weakening

Old Dominion managed to pass muster with its own first-quarter earnings report as results, though weak, lived up to analyst expectations.

ODFL said revenue fell 5.8% to $1.37 billion, which matched estimates, while earnings per share dropped 11% to $1.19, which was ahead of expectations at $1.14. Management said the results reflected the "ongoing softness in the domestic economy." Tonnage per day was down 6.3%, reflecting weakening demand in the industry.

Despite the weak results, management was able to reassure investors that it can weather the uncertainty in the economy.

Saia's earnings report seemed to shift investor perception of industry dynamics as it reported an increase in revenue in the first quarter, but a sharp drop in profit, showing it prioritized market share gains over profitability. Its revenue growth was also slower than in previous quarter, indicating that demand was weakening.

Saia's revenue rose 4.3% in the first quarter to $787.6 million, badly missing estimates at $811.5 million, while earnings per share tumbled from $3.38 to $1.86, well below expectations at $2.76.

The results from both companies clearly show softening pricing dynamics in an industry where capacity is key, and Saia noted that shipments failed to grow sequentially through the quarter as they typically do, which it blamed on an "uncertain macroeconomic environment."

What's next for ODFL and Saia

It's unclear what's happening next with tariffs or the trade war, but things seem likely to get worse before they get better for the LTL sector as Trump's "Liberation Day" announcement didn't even go into effect until April, when the first quarter was over.

These companies don't typically give guidance due to the volatility inherent in the business so investors should steel themselves for more challenges ahead. However, the LTL sector has historically been a winner, meaning over the long term these two stocks should be able to recover.

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Old Dominion Freight Line (NASDAQ: ODFL) is feeling the pinch from global trade uncertainty, but the impact isn't as bad as investors had feared. Shares of Old Dominion were trading up 9% as of 10 a.m. ET after the company reported better-than-expected results Wednesday morning. But the stock had given all that back in the next 30 minutes.

Driving into headwinds

Trucking company Old Dominion earned $1.19 per share in the first quarter on revenue of $1.37 billion, beating Wall Street's $1.14 per-share consensus profit estimate and matching the top-line estimate. Revenue was down 6% year over year and net income fell by 13%, but investors had been bracing for far worse results.

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Old Dominion specializes in domestic less-than-truckload shipping, meaning it transports freight for multiple customers from distribution centers. CEO Marty Freeman said that the results "reflect the ongoing softness in the domestic economy."

This is a business that benefits from scale. Old Dominion's operating ratio-- a measure of expenses compared to revenue -- rose 190 basis points to 75.4%. Freeman said the decreased volumes had a "deleveraging effect on many of our operating expenses."

Is Old Dominion stock a buy?

Investors should not expect a quick turnaround for this business. Freeman said "there continues to be uncertainty" in the economy, and with the full impact of tariffs only now beginning to hit U.S. ports, there will likely be a further slowdown in domestic trucking up ahead.

The good news is Old Dominion has the wherewithal to survive a downturn, and its best-of-class operations should help it to recover along with the economy. But trading at 30 times forward earnings in the face of a near-term slowdown, the stock can hardly be called inexpensive.

Old Dominion is a solid hold right now, but there is no reason to jump in and buy in this environment.

Should you invest $1,000 in Old Dominion Freight Line right now?

Before you buy stock in Old Dominion Freight Line, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Old Dominion Freight Line wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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*Stock Advisor returns as of April 21, 2025

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Old Dominion Freight Line. The Motley Fool recommends the following options: long January 2026 $195 calls on Old Dominion Freight Line and short January 2026 $200 calls on Old Dominion Freight Line. The Motley Fool has a disclosure policy.