Slower economy pushes quarterly income down 60% at ArcBest

Reduced customer demand thanks to a “more moderate” national economy pushed revenue and income down for Fort Smith-based ArcBest. Net income in the third quarter was down 60% and quarterly revenue dipped 4.67%.

Earnings per share during the quarter was 62 cents, below the $1.52 in the same quarter of 2018, and well below the consensus estimate of 87 cents per share. Net income in the quarter was $16.27 million, well below the $40.776 million in the 2018 quarter. Revenue during the quarter was $787.563 million, below the $826.158 million in the same period of 2018. The revenue was below the consensus estimate of $797.1 million.

“While below last year’s record-setting levels, the third quarter represented one of the best performances achieved for that period in recent history as we continued to see rational pricing amid softer demand compared with last year,” Chairman, President & CEO Judy McReynolds said in the earnings report posted Thursday (Oct. 31). “Revenue for expedite and truckload brokerage services declined as available capacity increased, which has been the case throughout the year, while our managed transportation solutions revenue continued to grow as a result of our team’s ability to provide valued expertise.”

Net income during the first nine months of 2019 totaled $45.534 million, down 12.4% from the $51.963 million in the same period of 2018. Total revenue in the first nine months for ArcBest was $2.27 billion, below the $2.319 billion the same period of 2018.

“Results for the first nine months remained solid though below last year’s record-setting pace, as our customers’ need for complex supply chain solutions aligns well with the broad array of services and expertise we provide,” said McReynolds. “We expect the trends that began in the first quarter, including more available capacity and softer market demand, to remain prevalent for the rest of the year.”

Revenue at ABF Freight, the company’s largest subsidiary and one of the nation’s largest less-than-truckload carriers, during the third quarter was $565.621 million, down from the $585.29 million in the same quarter of 2018. Operating income for the segment during the quarter was $31.772 million, well below the $50.15 million during the 2018 quarter.

Total revenue at ABF during the first nine months of 2019 is $1.631 billion, just ahead of the $1.626 billion in the same period of 2018. Operating income for the first nine months in the ABF segment is $81.575 million, up from the $66.933 million in the same period of 2018.

“Reduced customer demand during a more moderate economic period resulted in fewer third quarter shipments and lower total freight tonnage in the Asset‑Based (ABF) operating segment compared to the same period last year.  The lower business levels experienced during the third quarter reflect a reduction in LTL‑rated tonnage partially offset by an increase in TL‑rated, spot shipments,” the company noted in its statement.

Revenue at ArcBest Logistics and Fleetnet, the company’s two asset-light subsidiaries, during the third quarter was $253.734 million, down from the $255.943 million in the same quarter of 2018. Operating income for the segment during the quarter was $3.623 million, below the $11.081 million during the 2018 quarter.

Total revenue with the two asset-light operations during the first nine months of 2019 is $713.092 million, below the $732.414 million in the same period of 2018. Operating income for the first nine months of in the two segments is $9.989 million, down from the $20.563 million in the same period of 2018.

Company shares (NASDAQ: ARCB) closed Thursday at $28.89, down 64 cents. The earnings report was issued after the markets closed. During the past 52 weeks the share price has ranged between $44.41 and $24.69.