ArcBest first quarter revenue dips 6.3%, earnings per share misses estimate

An almost $22 million one-time non-cash charge helped push Fort Smith-based ArcBest’s first-quarter net income into negative territory. The company says a combination of less demand and too much capacity is pressuring revenue and margins.

The logistics and shipping company reported a first-quarter net income loss of $2.312 million on Tuesday (April 30), compared with a net income of $71.283 million in the same period of 2023. Revenue in the quarter was $1.036 billion, down 6.3% from the $1.106 billion in the same quarter of 2023.

A one-time charge of $21.6 million was taken during the quarter to reflect the company’s equity position in Phantom Auto, which closed its doors in the first quarter.

On a non-GAAP (generally accepted accounting principles) basis, the company posted quarterly net income of $32.3 million, below the comparable $39.477 million in the same period of 2023. Non-GAAP earnings per share in the quarter was $1.34, below the consensus estimate of $1.53.

ArcBest Chair, President and CEO Judy McReynolds noted accomplishments in the quarter.

“Reflecting on the past quarter, I am proud of our employees for their commitment to excellence, which resulted in better customer service and operational efficiency gains,” McReynolds noted in the earnings report. “This commitment was also evident in our performance in this softer freight environment and the receipt of numerous customer and industry recognitions, including ABF’s recent receipt of the prestigious ATA Excellence in Security Award.”

The company did post a gain in a closely-watched metric. Revenue per hundredweight in the quarter was $48.56, up 15.6% compared with $41.99 in the same quarter of 2023. However, shipments per day dipped 6.2% in the quarter, which reflects reduced demand in the freight market.

SEGMENT NUMBERS
Operating income at ABF Freight, a less-than-truckload carrier and ArcBest’s largest subsidiary, was $54.456 million in the quarter, better than the $47.471 million in the same quarter of 2023. ABF revenue in the quarter was $$671.467 million, below the $697.817 million in the same quarter of 2023.

“Total first quarter daily shipment and tonnage levels were below the prior year, as we continued to adjust freight mix, which positively impacted productivity and contributed to an improved operating ratio,” the company noted in the report.

ArcBest’s logistics segment posted a quarterly operating income loss of $15.763 million, below the loss of $12.221 million in the same quarter of 2023. Segment revenue was $396.363 million, below the $438.092 million in the same quarter of 2023.

“While the non-GAAP operating income for the Asset-Based segment was unchanged versus the prior-year period, Asset-Light non-GAAP operating income declined $8.9 million compared to the prior-year period, reflecting the current macro weakness impacting demand combined with excess capacity serving the full truckload market,” according to the company.

The first quarter follows a year in which net income and revenue fell from record numbers in 2022. ArcBest had a net income of $195.433 million in 2023, down 34.4% compared with $298.209 million in 2022. Revenue in 2023 totaled $4.427 billion, down 12% compared with $5.029 billion in 2022.

ArcBest shares (NASDAQ: ARCB) closed Monday at $127.89. During the past 52 weeks, the share price has ranged between $153.60 and $82.18.