ArcBest revenue reaches record of $3.093 billion, net income beats estimate

Transportation and logistics holding company ArcBest is on a five-year winning streak, with net income between 2014 and 2018 totaling more than $270 million, a far better outcome than the more than $82 million in losses posted between 2008 and 2013.

Full-year net income in 2018 for the Fort Smith-based publicly held company was $103.006 million, ahead of the $59.726 million in 2017, with per share income of $3.86 beating the consensus estimate of $3.78. Including one-time charges of $28.161 million for a multiemployer pension and a $13.512 million settlement on a nonunion pension, net income fell to $67.262 million.

Revenue for the year was $3.093 billion, up from $2.826 billion and the first time revenue topped the $3 billion mark, according to the company’s earning report posted Wednesday (Jan. 30) after the markets closed. The revenue tally narrowly topped the consensus estimate of $3.09 billion.

ArcBest is the parent company of ABF Freight, one of the nation’s largest less-than-truckload carriers, the ArcBest logistics division, and FleetNet.

“We entered 2018 anticipating a strong operating environment and for the most part, economic activity exceeded our expectations,” ArcBest Chairman, President and CEO Judy McReynolds said in the earnings statement. “Tighter capacity persisted throughout the year, leading customers to turn to ArcBest for the assured capacity we have available through our own assets, owner operators and contract carriers. Our strategy to meet all types of supply chain needs through a combination of offerings helped us significantly grow revenue and profitability.”

McReynolds also said a new five-year labor contract with the International Brotherhood of Teamsters signed earlier in the year helped the company avoid labor issues hurting some in the trucking and logistics industries.

“One of the major achievements of the year, a new five-year collective bargaining agreement with the International Brotherhood of Teamsters, provides us stability, low cost inflation and a strong foundation upon which to continue innovating on behalf of customers, and we are excited about the substantial growth opportunities that remain available to us across the organization,” she noted in the statement.

Fourth quarter net income $26.878 million, more than double the $11.7 million in the fourth quarter of 2017. Per share earnings of $1.01 also beat the consensus estimate of 93 cents per share. Revenue during the quarter reached $774.279 million, ahead of the consensus estimate of $767.64 million and better than the $710.721 million in revenue during the same quarter of 2017.

ABF posted full-year operating income of $103.9 million, well ahead of the $57.9 million in 2017. Excluding the pension charges, operating income for the segment was $141.8 million. Segment revenue in 2018 was $2.175 billion, up from the $1.993 billion in 2017. Billed revenue per hundredweight for the year was $34.16, up 9.2% from the $31.27 in 2017. The company shipped 3.187 million tons during the year, slightly ahead of the 3.183 million tons in 2017.

ArcBest’s logistics and FleetNet divisions posted full-year operating income of $27.973 million, better than the $23..002 million in 2017. The logistics division generated $23.588 million of the operating income. Full year logistics and FleetNet revenue totaled $976.249 million, up 13.1% compared with the $863.039 million in 2017.

Continued improved financials also helped the company build its cash and cash equivalents holdings to $190.186 million as of Dec. 31, up from $120.772 million at the end of 2017. The company also plans to invest in new equipment in 2019.

“For 2019, total net capital expenditures are estimated to range from $170 million to $180 million. This includes revenue equipment purchases of approximately $90 million primarily for ArcBest’s Asset-Based operation. The increase in the 2019 capital expenditure estimate is primarily associated with real estate projects, dock equipment, including forklifts, and technology investments,” the company noted in the report.

The company spent $134 million on capital expenditures in 2018, which was below guidance.

ArcBest shares (NASDAQ: ARCB) closed Wednesday at $41.06, up $1.15. During the past 52 weeks the share price has ranged between $30.90 and $51.45.