ArcBest 2022 net income up almost 40%; shipping demand dips in fourth quarter

Fort Smith-based ArcBest posted a record year for revenue and net income. However, fourth-quarter earnings per share and revenue missed analyst estimates primarily because of a shipping demand decline.

The shipping and logistics company announced Friday (Feb. 3) fourth-quarter revenue of $1.244 billion, better than $1.185 billion in the same quarter of 2021 but below the consensus estimate of $1.125 billion.

Net income in the quarter was $37.337 million, below  $65.488 million in the same quarter of 2021. Part of the decline is tied to an $18.3 million earn-out related to the company’s 2021 acquisition of Chicago-based MoLo in a $235 million deal. That deal included increased payment, recorded as an earn-out, to the previous owners based on certain financial performance conditions.

Full-year revenue was $5.324 billion, up 33.7% compared with 2021 revenue of $3.98 billion. Full-year net income was $298.209 million, up 39.6% compared with the $213.521 million in 2021.

“I am pleased to report that ArcBest exceeded $5 billion in annual revenue for the first time and delivered the highest annual earnings per share in company history,” Judy McReynolds, ArcBest chairman, president and CEO, noted in the earnings report. “Despite the challenges in 2022 as a result of ongoing macro trends, the ArcBest team remained focused on serving our customers and advancing our strategic initiatives.”

Fourth quarter revenue with ABF Freight, the company’s largest subsidiary and a less-than-truckload carrier, was $711.436 million, better than the $683.485 million in the same quarter of 2021. ABF operating income in the quarter was $75.131 million, below $83.123 million in the 2021 quarter. Tonnage shipped in the quarter declined by 6.3%

Full-year revenue at ABF was $3.01 billion, above the $2.573 billion in 2021. ABF operating income in 2022 was $381.133 million, better than the $260.707 million in 2021.

“Monthly business levels in ArcBest’s Asset-Based business slowed throughout the fourth quarter, resulting in moderate year-over-year revenue growth associated with flat, total daily shipments combined with a decrease in total freight tonnage and an increase in price,” the company noted about ABF. “Market conditions and diminished customer demand contributed to a decrease in the size of shipments moving through the Asset-Based network. Total Asset-Based freight trends were weaker in the quarter.”

Fourth quarter revenue with ArcBest logistics was $7479.098 million, slightly better than the $472.335 million in the same quarter of 2021. The logistics segment operating income in the quarter was a loss of $11.254 million, below the $12.823 million in the 2021 quarter.

Full-year logistics segment revenue was $2.139 billion, better than the $1.3 billion in 2021. Logistics operating income in 2022 was $52.725 million, also better than the $46.377 million in 2021.

“In the ArcBest Asset-Light segment, following growth earlier in the year, total revenue levels during the recent quarter were comparable to the previous year period. Fourth quarter 2022 benefited from a full quarter of operations of MoLo; however, revenue levels versus the prior year quarter were impacted by a slowdown in customer shipping,” the company noted.

Full-year revenue per billed hundredweight, a closely-watched metric in the trucking industry, was $45.45, better than the $39.70 in 2021. Tonnage shipped in 2022 was 3.304 million tons, p 1.6% compared with 2021.

ArcBest shares (NASDAQ: ARCB) closed Thursday at $90.15 and were trading around 3.7% lower in Friday morning trading. During the past 52 weeks, the share price has ranged between $96.80 and $65.16.