ArcBest 2024 net income down 11%, revenue dips 5.6%

Higher input costs and a “prolonged” weakness in the manufacturing sector pushed fourth quarter net income down more than 40% at Fort Smith-based ArcBest. However, quarterly earnings per share of $1.24 beat the consensus estimate of 88 cents.

The shipping and logistics company on Friday (Jan. 31) reported fourth quarter net income of $29.035 million, down 40.5% compared with the $48.79 million in the same quarter of 2023. Revenue in the quarter was $1.001 billion, below the $1.089 billion in the 2023 quarter and below the consensus estimate of $1.01 billion.

Transportation sector analysts with Little Rock-based Stephens Inc. lowered earnings expectations for ArcBest because of lower activity in the manufacturing sector.

“We lowered our 4Q24 EPS estimate to $1.06, below the street’s $1.08 estimate, primarily due to softer tonnage updates although the softer results are broadly expected due to continued industrial weakness,” the analysts noted in a Jan. 6 report.

For the year, ArcBest had net income of $173.961 million, down 11% compared with $195.433 million in 2023. Revenue for the year was $4.179 billion, down from $4.427 billion in 2023. Revenue per shipment fell 1% in 2024, and tonnage shipped was down 14.3%.

“Throughout 2024, we made significant progress on controlling costs, improving productivity, and enhancing our service quality. These achievements underscore our commitment to excellent execution and are yielding tangible results. I want to extend a heartfelt thank you to our dedicated employees, whose hard work and innovation have been pivotal in reaching these milestones. Together, we are well-positioned for continued growth and success,” Judy McReynolds, ArcBest chairman and CEO, noted in the earnings report.

ArcBest in early January cut corporate jobs in response to ongoing weakness in the freight sector.

“Decisions that impact our employees are always difficult. The industry has faced a tough economic environment and freight recession, and unfortunately due to this continued downturn combined with realigning multiple functions we had to make the difficult decision to reduce less than 30 roles. Our focus is still on achieving significant growth and we will continue to monitor the external environment and business levels,” Autumnn Mahar, ArcBest director of external communications and public relations, noted in a statement to Talk Business & Politics.

The company also in January announced several management changes.

ABF REVENUE, OPERATING INCOME
ABF, ArcBest’s largest subsidiary and a less-than-truckload carrier, had a 0.6% increase in billed revenue per hundredweight for the quarter, and an 11.7% gain for the year. Higher wages and insurance costs were some of the factors weighing on the segment in 2024.

“Prolonged manufacturing sector weakness continues to negatively impact weight per shipment metrics. Productivity improvements of 2.3 percent and other cost initiatives helped mitigate the impact of the soft market environment, higher insurance costs, and higher labor cost increases related to the annual union contract rate increase, which went into effect during the third quarter of 2024,” the company noted.

Following are segment financials for the quarter and the full year.
Revenue
4Q 2024: $656.200 million
4Q 2023: $709.986 million

Operating income
4Q 2024: $52.335 million
4Q 2023: $87.553 million

Revenue
2024: $2.75 billion
2023: $2.871 billion

Operating income
2024: $242.603 million
2023: $253.152 million

ARCBEST LOGISTICS FINANCIALS
The company said the segment saw improvements in the quarter, but continued lower demand in the freight industry resulted in a quarterly operating income loss. However, the loss was better than that posted in the 2023 quarter.

“Shipments per day were lower by 2.1 percent. The segment continues to benefit from productivity initiatives, as shipments per employee per day improved 20.8 percent, on a year-over-year basis, but the soft freight environment and excess truckload capacity continue to impact results,” according to the company.

Following are segment financials for the quarter and the full year.
Revenue
4Q 2024: $375.432 million
4Q 2023: $413,425 million

Operating income
4Q 2024: -$1.579 million (loss)
4Q 2023: -$7.656 million (loss)

Revenue
2024: $1.552 billion
2023: $1.68 billion

Operating income
2024: $58.444 million
2023: –$12.271 million (loss)

Founded in 1923, ArcBest has around 15,000 employees at 250 locations. ArcBest shares (NASDAQ: ARCB) opened Thursday at $94.51. During the past 52 weeks the share price has ranged between $153.60 and $91.01.

The Stephens analysts expect financials to improve for ArcBest and have a $132 price target on the shares.