What happened

Shares of Old Dominion Freight Line (ODFL -1.08%) were up nearly 10% on Thursday following the trucking company's quarterly earnings report. While Old Dominion is feeling the impact of the COVID-19 pandemic, it seems to be managing the crisis as well as can be expected.

So what

Old Dominion reported first-quarter earnings of $1.11 per share, one penny short of consensus, on revenue of $987.3 million that came in about $4 million ahead of what analysts had expected.

The company's operating ratio, a measure of operating expenses as a percentage of revenue, improved to 81.4% from 82% in the year-earlier period, despite revenue falling slightly and the company paying a special employee bonus during the quarter.

An Old Dominion truck on the road

Image source: Old Dominion Freight Line.

CEO Greg C. Gantt said in a statement that the company's mix of business changed in the quarter due to the pandemic, but Old Dominion didn't really see the full impact until late in the quarter.

"While revenue was lower, our results for most of the first quarter were in line with the expectations we had at the beginning of 2020," Gantt said. "Demand for our services declined in the last half of March, however, due to the widespread effects of the COVID‑19 pandemic on the domestic economy."

Now what

Should the economy fall into a recession, shipping companies like Old Dominion would see more of an impact in the quarters to come. Old Dominion is taking prudent steps in anticipation of a downturn, reducing planned expenditures for real estate by about $50 million.

"As the economy declined due to the unprecedented stay-at-home and similar orders issued throughout the country, we have quickly adapted to the decrease in our business levels," Gantt said. "Regardless of the economic environment, we will continue to focus on managing our variable costs while also diligently controlling discretionary spending."

Old Dominion is a best-in-class operator with a strong balance sheet; current shareholders should rest easy, knowing the company is likely to come through any rough patches ahead without too many issues. However, the stock has been an outperformer year to date -- up 10%, compared to a 13% decline in the S&P 500 and a 32% decline in the Dow Jones Global Shipping Index.

As good as Old Dominion is, it's still not immune to the business cycle. I would hold off buying shares despite its good results.