With improving revenue, trucking and transportation giant Arkansas Best posted a narrower first quarter loss compared to a year ago.
Arkansas Best reported a net loss of $13.4 million versus an $18.2 million setback one year ago. Revenues grew to $520.69 million in the quarter compared to $440.87 million in last year’s first quarter.
The Fort Smith-based trucking firm used its earnings report to highlight its continuing contract negotiations with its labor union – which has been a source of contentious talks for months.
“Year-over-year revenue and tonnage growth at LTL carrier ABF Freight System, Inc., were offset by higher wage and benefit costs for employees represented by the International Brotherhood of Teamsters,” the company said in its earnings release.
Arkansas Best is also making investments in a couple of new ventures aimed at diversifying its revenue base. It said it has invested in its brokerage business as well as Panther Expedited Services, a logistics coordination subsidiary it acquired last year for roughly $180 million.
“First quarter revenue and operating income at our emerging businesses reflected growth and improvement as we invested heavily in these businesses during 2012. They represent a critical piece of Arkansas Best’s strategy to achieve sustained profitability,” said Arkansas Best President and CEO Judy R. McReynolds. “The investments made so far have improved the financial performance of these subsidiaries and strengthened their service offerings and their ability, both individually and through significant cross-selling opportunities, to better serve customers with full supply-chain solutions.”
ABF Freight’s first quarter operating loss deepened despite revenue growth and improving business levels. ABF Freight, the company’s LTL (less-than-truckload) carrier service is Arkansas Best’s largest subsidiary.
McReynolds noted that the company’s high-cost structure continues to weigh on results. She said it underscored the need for a new labor agreement that reflects the increasingly competitive LTL industry.
“After months of hard work and a second extension of contract talks through May 31, the negotiating teams continue to make progress on developing a contract agreement for our Teamster-represented employees that is expected to provide ABF greater operational flexibility and lower costs in order to effectively compete in the future.”