Improving consumer demand helps ArcBest quarterly revenue and income beat estimates

More consumer demand and not enough equipment to ship what the consumer demands helped Fort Smith-based ArcBest boost first-quarter revenue by more than 18% and post earnings per share of 87 cents, well past the consensus estimate of 58 cents.

ArcBest, a shipping and logistics holding company, on Tuesday (May 4) posted first-quarter net income of $23.361 million, significantly more than the $1.902 million in the first quarter of 2020. Revenue in the quarter was $829.213 million, up 18.2% compared with the $701.399 million in the first quarter of 2020, and above the consensus estimate of $812.07 million.

“We’re pleased to report our best-ever operating income for the first quarter as well as increased revenue and profitability in what is historically the most challenging quarter of the year,” Judy McReynolds, ArcBest chairman, president and CEO, noted in the earnings report. “These strong results reflect our ability to create solutions to support our customers as they continue to face supply chain challenges associated with their rebound from the COVID-19 pandemic.”

The company also benefited from property sales that totaled $8.7 million in the quarter, above the $2.2 million in the first quarter of 2020.

ABF Freight, the largest subsidiary of ArcBest and one of the nation’s largest less-than-truckload carriers, posted first-quarter revenue of $556.292 million, above the $515.713 million in the same quarter of 2020. Operating income during the quarter was $30.055 million, more than double the $13.24 million in the same quarter of 2020.

“As shippers are experiencing improving trends in their businesses, greater demand for ArcBest’s Asset-Based services resulted in increased first-quarter revenue and higher profitability. Shipment and tonnage growth during the quarter was also positively impacted by unseasonal strength in the housing market associated with a shift in buyer demand due to the pandemic,” the company noted in the earnings report.

Revenue per hundredweight at ABF Freight, a key metric in the less-than-truckload segment, was $36.09 in the first quarter, up 8.8% compared with the $33.16 in the same quarter of 2020. The company shipped 778,415 tons in the quarter, up 0.3% compared with the 776,468 in the same quarter of 2020. Shipments in the quarter totaled 1.215 million, better than the 1.203 million in the first quarter of 2020.

The company’s asset-light divisions, ArcBest and FleetNet, also performed well. ArcBest (logistics) revenue was $252.336 million, well ahead of the $164.775 million in the first quarter of 2020. Operating income in the segment was $8.265 million, an almost $10 million swing from the loss of $1.409 million in the 2020 first quarter.

FleetNet, which provides equipment maintenance and other services for transportation fleets, posted quarterly revenue of $59.163 million, above the $52.439 million in the 2020 quarter. Operating income in the segment was $1.023 million, down slightly from $1.04 million in the 2020 quarter.

“Strong first-quarter revenue growth in the Asset-Light ArcBest segment resulted from the positive impacts of continuing strength in customer demand combined with higher rates driven by the limited availability of equipment capacity in the marketplace,” the company noted.
ArcBest posted 2020 net income of $71.1 million, up 77.8% compared with $39.985 million in 2019. Full-year revenue was $2.94 billion, down from $2.988 billion in 2019.

Company shares (NASDAQ: ARCB) opened Tuesday at $74.07. During the past 52 weeks, the share price ranged between $77.98 and $17.58.