Arkansas Best Reports Drop in 3Q Profit

Citing a “tenuous” economy, Arkansas Best Corp. said third-quarter net income dropped 47 percent from the same quarter last year.

Reporting before the markets opened Thursday, the Fort
Smith-based holding company posted net income of $6.52 million, or 24 cents per share, for the quarter that ended Sept. 30, compared to $12.27 million, or 46 cents per share, in the same quarter last year.

The company missed the average earnings estimate of 26 cents per share from 17 analysts surveyed by Thomson Reuters.

Revenue rose 13 percent to $577.55 million.

ABF Freight System Inc., the company’s largest subsidiary, accounts for more than 90 percent of Arkansas Best’s revenue.

The results “reflect weakness in the economy that contributed to reduced customer business levels and lower profitability at ABF,” Arkansas Best president and CEO Judy R. McReynolds said in a news release. “However, at our emerging non-asset-based companies, we are encouraged by the continuation of strong revenue and improving profitability trends in the midst of a tenuous economy.”

Some of the pressure in the quarter came from costs associated with its union contract that expires in March, McReynolds said in the release. The company will begin negotiations with the International Brotherhood of Teamsters on Dec. 18.

“ABF’s next labor agreement offers an opportunity for us to work together with the Teamsters and our employees to ensure that ABF is viable in the marketplace and able to grow jobs and effectively compete for additional, profitable business,” she said.

On Oct. 23, Arkansas Best declared a quarterly cash dividend of 3 cents per share to holders of record of its common stock on Nov. 6, payable Nov. 20.

Arkansas Best shares were at $8.25 at mid-morning Thursday on the Nasdaq, up 20 cents or 2.48 percent. Shares have traded between $7.32 and $22.79 in the past year.