ArcBest net income up 104% in the first half of 2022

by Michael Tilley ([email protected]) 1,142 views 

Unwinding the global supply chain continues to benefit Fort Smith-based ArcBest. The logistics and shipping company on Friday (July 29) reported a 104% increase in net income in the first six months of 2022, with second-quarter net income up 68%.

Second-quarter revenue was $1.392 billion, well ahead of the $948.973 million in what was a robust second quarter of 2021. Net income in the second quarter was $102.461 million, up 68% compared with the $60.981 million in the same quarter of 2021. Earnings per share in the second quarter was $4, beating the consensus estimate among analysts of $3.95. The revenue also beat the consensus estimate of $1.37 billion.

Net income in the first half of 2022 was $172.03 million, up 104% compared with the $84.342 million in the same period of 2021. Revenue in the first half was $2.726 billion, well above the $1.778 billion in the same period of 2021. The company is on track to post annual revenue above $4 billion for the first time in its almost 100-year history.

“As our customers’ supply chains become even more complex and economic pressures increase, our strategic focus on technology, innovation and the development of our people positions us to thrive in all environments. By advancing our strategic plan and investing capital back into the business, we continue to differentiate ArcBest and position our company as a logistics leader, our customers’ partner of choice, and a consistent generator of superior value for investors,” ArcBest Chairman, President and CEO Judy McReynolds noted in the earnings report.

ABF NUMBERS
ABF Freight, the company’s largest subsidiary and a less-than-truckload carrier, posted second-quarter revenue of $802.622 million, ahead of the $652.832 million in the same quarter of 2021. Operating income in the segment was $116.656 million, also better than the $63.911 million in the 2021 quarter.

ABF revenue in the first half of the year was $1.507 billion, up from $1.209 billion in the same period of 2021. Operating income in the first half of the year was $196.69 million, considerably better than the $93.966 million in the same period of 2021.

The amount of tonnage shipped compared to revenue per shipment clearly shows the segment continues to have pricing power. Tonnage shipped in the first half of the year was 1.695 million, up 4%, with revenue per shipment up 22.3%. Billed revenue per hundredweight, a closely watched metric for the company, was $44.77 in the first half of the year, up 19.3% compared with $37.54 in the same period of 2021.

“Customer demand drove increases in this year’s freight shipments and tonnage, resulting in growth compared to strong, double-digit percent increases in second quarter 2021. Strength in base freight rate pricing continued during the quarter, reflecting the value of the logistics solutions ArcBest offers its customers during an ongoing period of supply chain volatility,” the company noted in the earnings report.

LOGISTICS GAINS
ArcBest Logistics, the company’s second-largest subsidiary, saw a big revenue boost. Second quarter revenue was $549.655 million, up 103% compared with the $270.748 million in the same quarter of 2021. Operating income in the segment was $27.479 million, well above the $15.127 million in the 2021 quarter.

First half revenue was $1.144 billion, up 118.7% compared with the same period in 2021. Operating income in the first half of the year was $48.595 million, also more than double the $23.392 million in the same period of 2021. Revenue per shipment in the segment rose 23.5% in the first half of the year, another sign of pricing power for the company.

“Higher market rates combined with continued customer demand for our services resulted in strong second-quarter revenue growth and another quarter of record profitability in the ArcBest Asset-Light segment. Enhanced revenue and shipment totals versus the same period last year reflect the positive impact of additional truckload brokerage business from MoLo, for which the integration is on schedule,” the company noted.

ArcBest acquired Chicago-based MoLo Solutions in late 2021 in a $235 million deal. MoLo was a truckload freight brokerage firm with access to more than 70,000 “carrier partners” in the truckload shipping business.

FleetNet, the ArcBest subsidiary that provides maintenance for truck fleets, posted first-half revenue of $160.51 million, better than compared with the $118.71 million in the same period of 2021. Operating income in the segment was $3.309 million, better than the $2.161 million in the same period of 2021.

ArcBest’s 2021 net income was $213.521 million, well above the $71.1 million in 2020. Full-year revenue totaled $3.98 billion, up 35.4% compared with $2.94 billion in 2020.

The company announced July 27 a 12-cent dividend payable Aug. 24 to shareholders of record on Aug. 10. Company shares (NASDAQ: ARCB) closed Thursday at $87.68. During the past 52 weeks, the share price has ranged between $125 and $57.80.