ArcBest quarterly income down 60%, revenue down 11.5%

Quarterly and year-to-date income and revenue is down for Fort Smith-based ArcBest, primarily a result of an environment in which the shipping and logistics company is handling less freight and at lower rates.

The company on Friday (Oct. 27) posted third quarter net income of $34.917 million, down 60.1% compared with the $88.842 million in the same quarter of 2022. Earnings per share of $1.42 was below the consensus estimate of $1.50.

Revenue in the quarter totaled $1.128 billion, down 11.5% from $1.275 billion in the same quarter of 2022. The revenue was just below the consensus estimate of $1.13 billion.

Net income in the first nine months of the year was $146.643 million, down 43.8% compared with the same period in 2022. Revenue in the nine months reached $3.337 billion, down 13.7% compared with the same period in 2022.

Revenue per hundredweight, a closely-watched metric in the sector, during the quarter was $47.28, up 1.9% compared with the same period in 2022. In the first nine months, the per hundredweight revenue was $43.17, down 4.7% compared with the same period in 2022.

Revenue per shipment during the quarter was $574.95, down 6% compared with the same period in 2022. Revenue per shipment was down 9.6% through the first nine months of 2023. Tonnage shipped during the quarter was down 8.5%, and down 1.4% in the nine months.

ABF FREIGHT
The company noted in the earnings report that it did benefit from the bankruptcy filing of Yellow. Yellow, one of the nation’s largest less-than-truckload (LTL) carriers, had more than 30,000 employees.

“Compared to the prior-year period, third quarter revenue in ArcBest’s Asset-Based business declined due to a weaker logistics industry backdrop, including continued manufacturing sector contraction,” the company noted. “However, this impact was somewhat offset by increased revenue from new shipments added as a result of recent market disruption associated with the third quarter bankruptcy of a major LTL competitor.”

ABF Freight, the largest ArcBest subsidiary and a LTL carrier, had quarterly revenue of $741.186 million, down from $791.531 million in the same quarter of 2022. Operating income in the segment was $74.823 million, well below the $109.312 million in the same period of 2022. ABF revenue in the first nine months totaled $2.161 billion, below the $2.299 billion in the same period of 2022. Operating income in the first nine months was $165.619 million, also below the $306.002 million.

LOGISTICS
ArcBest’s logistics – asset light – segment was a star for the company in the post-pandemic supply chain disruption but has struggled in 2023. With supply chain bottlenecks mostly over, logistics providers have seen rates plummet.

“Third quarter Asset-Light results, compared to the prior-year period, reflect lower revenue per shipment and reduced margins associated with business mix changes and the soft rate environment. Our truckload solution experienced significant margin compression as decreases in customer pricing exceeded the reduced cost of purchased transportation,” the company noted.

Quarterly revenue in logistics was $419.312 million, down from $515.235 million in the same quarter of 2022. The segment posted an operating loss of $3.704 million, a wide swing from a $15.384 million in the same period of 2022. Logistics revenue in the first nine months totaled $1.267 billion, down from $1.66 billion in the 2022 period. The segment posted an operating loss of $4.615 million in the first nine months of 2023, also well below the $63.979 in operating income during the same period of 2022.

ArcBest in the third quarter posted one-time charges of $26.028 million. Part of that was $15.1 million in non cash impairment related to a Vaux pilot facility. Vaux is a new process the company was testing to load and unload trucks.

ArcBest shares (NASDAQ: ARCB) closed Thursday at $87.99 and was trading around $100 in early Friday trading. During the past 52 weeks the share price has ranged between $122.86 and $68.