ArcBest posts decline in quarterly revenue, operating income

Weakness in the manufacturing sector and too much shipping equipment chasing fewer shipments contributed to lower quarterly revenue and operating income declines for Fort Smith-based ArcBest.

The shipping and logistics company early Friday (Nov. 1) posted third quarter net income of $100.314 million, well ahead of the $34.917 million in the same quarter of 2023. However, an after-tax benefit of $69.1 million boosted the net income. Without the one-time benefit, net income was $38.8 million, or $1.68 per share, which is below the consensus estimate of $1.83.

The one-time benefit resulted from a $91.9 million reduction in a contractual obligation – “earnout” – related to the 2021 acquisition of Chicago-based MoLo Solutions.

Revenue in the quarter was $1.063 billion, 5.76% below the $1.128 billion in the same quarter of 2023, and below the consensus estimate of $1.07 billion.

“Third quarter tonnage declines were driven by a 10.7 percent decrease in weight per shipment, while daily shipments were down only slightly. Prolonged manufacturing sector weakness continues to negatively impact weight per shipment metrics,” the company noted in Friday’s earnings report. “Productivity improvements of 5.7 percent and other cost initiatives helped mitigate the impact of the softer market environment, higher insurance costs, and higher labor cost increases related to an annual union contract rate increase, which went into effect during the third quarter of 2024.”

Net income, including the one-time benefit, in the first three quarters of the year totaled $144.962 million, just below the $146.643 million in the same period of 2023. Revenue in the first nine months was $3.177 billion, down 4.8% compared with the $3.337 million in the same period of 2023.

ABF NUMBERS

ABF, ArcBest’s largest subsidiary and a less-than-truckload carrier, had a 7.4% increase in billed revenue per hundredweight. The segment also had an operating ratio of 91%, better than the 88.8% in the same quarter of 2023. However, total tonnage per day was down 11.3%.

Following are the quarterly and first nine months numbers for the segment.
Revenue
3Q 2024: $709.722 million
3Q 2023: $741.186 million

Operating income
3Q 2024: $64.02 million
3Q 2023: $74.823 million

Revenue
First nine months 2024: $2.093 billion
First nine months 2023: $2.161 billion

Operating income
First nine months 2024: $190.268 million
First nine months 2023: $165.619 million

ARCBEST LOGISTICS

The company’s logistics segment faced fewer shipments and lower rates in the third quarter thanks to the ongoing freight recession.

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

Following are the quarterly and first nine months numbers for the segment.
Revenue
3Q 2024: $385.524 million
3Q 2023: $419.312 million

Operating income
3Q 2024: $84.779 million (includes the one-time benefit of $91.9 million)
3Q 2023: -$3.704 million (loss)

Revenue
First nine months 2024: $1.117 billion
First nine months 2023: $1.267 billion

Operating income
First nine months 2024: $60.023 million
First nine months 2023: –$4.615 million (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) closed Thursday at $104.18, down $2.68. During the past 52 weeks, the share price has ranged between $153.60 and $94.77.