They’re not out of the woods yet, but Arkansas Best Corp. had a pretty solid third quarter.
The Fort Smith-based trucking and transportation firm posted quarterly net income of $13.98 million on revenue of $623.41 million. One year ago, Arkansas Best showed $6.52 million in profits on revenue of $577.55 million.
“This was our strongest quarter of the year thanks to the solid performances of our emerging businesses and a tonnage uptick for ABF Freight,” said Arkansas Best President and CEO Judy McReynolds. “In particular, Panther Expedited Services, which we acquired in June 2012, showed improved demand in several of the industries it serves.”
For the first nine months of 2013, ABF Freight’s operating income was just above break-even, the company noted. Less-than-truckload carrier ABF Freight is the largest subsidiary of Arkansas Best’s business.
On October 30, the company announced ratification of a revised labor contract with the International Brotherhood of Teamsters, with savings from wage and benefit reductions possibly helping the company to avoid three consecutive years of losses.
The agreement is expected to result in savings of between $55 million and $65 million a year for Arkansas Best. The savings come from an immediate 7% wage reduction that is recovered by the fifth year of the contract. The wage and benefit reductions began Nov. 3. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of those workers are drivers.
“While our third quarter results improved on prior quarter trends and reflected strides in our emerging businesses, we remain focused on returning ABF Freight to its historic profitability,” said McReynolds. “After a long and complex labor negotiation process at ABF Freight, we are pleased to have an implemented contract that allows us to lower costs while still providing the best-paying jobs in the industry. Going forward, we will continue with initiatives at ABF and all of our operating companies that will enable us to better serve our customers in the rapidly evolving transportation and logistics marketplace.”
Company officials will hold a conference call at 8:30 a.m. this morning to discuss results.
Shares of Arkansas Best Corp. (NASDAQ:ABFS) closed trading Friday at $26.70. The company’s shares have traded between $6.43 and $29.89 during the last year.