ArcBest Earnings Drop 32% in 3Q, but Still Beat Analysts' Estimates
The company posted $12.9 million in earnings in the quarter, or 49 cents per share, down 32% from one year ago. Revenue edged up 0.6% to $713.9 million, but expenses rose at 2.6% to $693.5 million to account for the lower overall profits year-over-year.
“As we have seen throughout the year, pricing in the less-than-truckload sector remained rational despite a soft economic environment and we continued to experience benefits from investments in new equipment,” said Judy McReynolds, ArcBest's CEO.
Revenue at the ABF Freight less-than-truckload unit dropped slightly to $509.5 million compared to $511.3 million in third quarter 2015, which the company said was due to lower diesel fuel prices. Tonnage per day decreased 2.8% while shipments per day increased 1.6% year-over-year. Revenue per one-hundred pounds of freight increased 2.8% in part due to rate hikes the company enacted for 2016.
Operating income at ABF Freight fell to $18.1 million from $26.6 million. ABF's operating ratio deteriorated to 96.5% from 94.8% year-over-year.
The logistics and freight brokerage units also had mixed results. Revenue rose to $217.9 million compared to $211.1 million in third quarter 2015. Operating income after deducting expenses dropped to $6.5 million compared to $8.5 million last year.
The Panther Premium Logistics subsidiary posted strong results, while ABF Logistics saw weaker profits because of lower revenue per shipment and disruptions in the ocean shipping market, the company said.
President Judy McReynolds also announced on Nov. 3 that ABF Logistics, ABF Moving and Panther Premium Logistics will be consolidated into a single logistics unit marketed under the ArcBest name effective Jan. 1.
ArcBest, which ranks No. 12 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, beat the Bloomberg News consensus of analysts by two cents. It also reported $1.2 million more in net income than the consensus forecast.
