What happened

Old Dominion Freight Line (NASDAQ:ODFL) has long been viewed as a best-of-breed trucking operation. The stock lived up to that reputation in the first half of 2020, gaining 34%, according to data provided by S&P Global Market Intelligence, despite difficult conditions.

By comparison, the S&P 500 was down 4% during that period, and the Dow Jones Transportation Index was off 15%.

ODFL Chart

ODFL data by YCharts

So what

The pandemic was expected to hit transportation and logistics stocks hard, with global economic activity slumping due to virus-related shutdowns and stay-at-home orders. But somehow Old Dominion didn't get the memo.

The company is one of the nation's largest providers of "less-than-truckload" freight services for customers who don't need a full truck to ship goods. In April it reported revenue that came in ahead of expectations and earnings that missed by only a penny.

An Old Dominion truck on a city street.

Image source: Old Dominion.

Old Dominion showed its cost discipline in the face of headwinds. The company's operating ratio, a measure of operating expenses as a percentage of revenue, improved to 81.4% from 82% in the prior year quarter despite revenue falling slightly and Old Dominion paying a one-time employee bonus 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," CEO Greg C. Gantt said in a statement announcing the results. "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."

Old Dominion in early May sent a clear message its business was holding up well despite the pandemic crisis. At a time when many companies were suspending share repurchases to preserve cash and ride out the downturn, Old Dominion's board approved a new $700 million buyback plan.

Now what

Old Dominion is scheduled to release second-quarter results on July 30, and investors will be eager to see how business held up. The company's monthly updates have reported a "significant decline " in the domestic economy since March, but Old Dominion has also been working to keep variable costs low to account for demand.

There is only so much any trucking company can do to defy gravity in the face of tough macroeconomic conditions, and Old Dominion shares will likely have a hard time repeating their outperformance in the first half of 2020 in the last six months of the year.

But for long-term focused investors, this company through the downturn so far has proven it is a reliable performer in good times and bad. I wouldn't rush to buy in now at these levels, but existing holders should sleep well at night with Old Dominion in the portfolio.