First quarter revenue, net income down at ArcBest

by Michael Tilley ([email protected]) 1,075 views 

First quarter revenue at ArcBest was down almost 13% compared with the same quarter in 2022, the Fort Smith-based company reported Friday (April 28). Reduced consumer demand and a tougher pricing environment pushed revenue and income lower.

The shipping and logistics company reported first quarter revenue of $1.106 billion, down 12.7% compared with $1.268 billion in the same quarter of 2022. Net income – adjusted, non-GAAP – was $39.5 million, well below the comparable $78.2 million in the same quarter of 2022.

The adjusted earnings per share of $1.58 was below the consensus estimate of $1.97. Revenue and net income were adjusted to primarily to reflect an after-tax gain of $51.4 million related to the sale of FleetNet during the quarter. ArcBest announced Feb. 28 the sale of its FleetNet segment to Cox Automotive in a $100 million cash deal. The maintenance and repair unit of ArcBest generated 6.4% of overall revenue in 2022 and 1.5% of operating income.

Revenue at ABF Freight, the company’s largest subsidiary and one of the nation’s largest less-than-truckload carriers, was $697.817 million in the quarter, down 1.1% compared with the same quarter in 2022. Operating income in the segment was $47.471 million, below the $80.034 million in the same quarter of 2022.

“First quarter total revenue in ArcBest’s Asset-Based business (ABF) decreased compared to the prior-year period influenced by reduced customer order quantities related to softness in the general economy,” the company noted in the earnings report.

Revenue in the ArcBest logistics segment was $438.092 million in the quarter, down 26.4% compared with the same quarter in 2022. The segment posted an operating loss of $14.091 million in the quarter, a wide swing from the $21.116 million gain in the same quarter of 2022.

“In the Asset-Light segment, lower customer demand and reduced market rates combined with changes in business mix contributed to a decrease in total revenue compared to the previous year period,” the company noted in Friday’s report. “Total Asset-Light daily shipments during the recent quarter increased slightly versus prior year due to truckload shipment growth, despite decreases in expedite shipment counts. However, the decrease in total Asset-Light revenue per shipment contributed to reduced first quarter profitability.”

The company also announced in the earnings report the March 1 rollout of Vaux, a proprietary system to manage freight.

“Vaux enables the entire contents of a trailer to be unloaded in minutes and offers complete visibility into freight movement within warehouse facilities, on the dock and over the road. It creates efficiencies and orchestrates seamless warehouse operations,” the company noted.

Thanks in part to the sale of FleetNet, ArcBest continues to have a healthy cash position. Cash and cash equivalents at the end of the quarter totaled $203.319 million, better than the $158.264 million as of Dec. 31.

The first quarter follows a record 2022 in which 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.

ArcBest shares (NASDAQ: ARCB) closed Thursday at $89.90 and were trading around 3% higher in Friday morning trading. During the past 52 weeks, the share price has ranged between $104.87 and $65.88.