ArcBest second quarter income up 16%, revenue down 4.3%

In the face of “macroeconomic headwinds,” Fort Smith-based ArcBest was able to post a 16% gain in second quarter net income compared to the same quarter in 2023. Much of the gain is attributable to a 68% operating income boost with ABF Freight.

The shipping and logistics company on Friday (Aug. 2) posted quarterly net income of $46.924 million, up 16% compared with $40.443 million in the same quarter of 2023. Per share earnings of $1.96 missed the consensus estimate of $2.06.

The company recorded charges of $14.449 million in the quarter that pushed net income lower. The charges were primarily related to “costs related to our customer pilot offering of Vaux, and other investments in ArcBest technology and innovations.”

Revenue in the quarter was $1.077 billion, below the $1.103 billion in the same quarter of 2023, but above the consensus estimate of $1.06 billion.

“I am incredibly proud of our employees’ commitment to utilizing our quality process in pursuit of excellence every day. This dedication has led to significant improvements in our operational execution, with ABF Freight achieving its best on-time service performance in recent years,” Judy McReynolds, ArcBest chairman and CEO, said in the earnings report. “Furthermore, our substantial year-over-year improvement in operating income is a solid performance, especially considering ongoing macroeconomic headwinds.”

Net income in the first half of 2024 totaled $44.612 million, well below the $111.726 million in the same period of 2023. Revenue in the first half was $2.114 billion, just below the $2.209 billion in the same period of 2023.

ABF NUMBERS
ABF, ArcBest’s largest subsidiary and a less-than-truckload carrier, benefited in the quarter from a 4.8% increase in per day shipments and a 20.3% per day increase in tonnage shipped. Billed revenue per hundredweight, a closely-watched metric in the industry, rose 23% in the quarter.

Following are the quarterly and first half numbers for the segment.
Revenue
2Q 2024: $712.725 million
2Q 2023: $722.015 million

Operating income
2Q 2024: $72.792 million
2Q 2023: $43.325 million

Revenue
First half 2024: $1.384 billion
First half 2023: $1.419 billion

Operating income
First half 2024: $126.248 million
First half 2023: $90.796 million

“On a non-GAAP basis, the Asset-Based segment generated $21.1 million more operating income than second quarter 2023 despite lower revenue levels and higher labor costs, which highlights the continued focus on serving core customers well and improving operational efficiencies,” the company noted in the earnings report.

ARCBEST LOGISTICS
The company’s logistics segment continues to struggle in a freight environment with more assets than demand.

“Compared to the second quarter of 2023, Asset-Light revenues were impacted by lower revenue per shipment and reduced margins associated with the soft rate environment and a higher mix of managed transportation business, which has lower revenue per shipment and margins,” the company noted in Friday’s report.

Following are the quarterly and first half numbers for the segment.
Revenue
2Q 2024: $395.817 million
2Q 2023: $409.816 million

Operating income
2Q 2024: –$9.418 million (loss)
2Q 2023: $13.81 million

Revenue
First half 2024: $792.18 billion
First half 2023: $847.908 billion

Operating income
First half 2024: –$24.756 million (loss)
First half 2023: –$911,000 (loss)

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) were set to open Friday at $127.35. During the past 52 weeks, the share price has ranged between $153.60 and $86.93.