ArcBest Reports 187% Rise in Earnings for Third Quarter
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ArcBest Corp. experienced a 187% increase in earnings despite a decline in revenue during the third quarter of 2024, the company reported Nov. 1.
The Fort Smith, Ark.-based logistics company posted net income of $100.3 million, or $4.23 per diluted share, for the three months ending Sept. 30. That compared with $34.9 million, $1.42, during the same time the previous year. Total revenue decreased by 5.8% to $1.06 billion from $1.13 billion.
ArcBest ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 40 on the TT Top 100 logistics companies list.
“We remain steadfast in our commitment to our strategic pillars of growth, efficiency and innovation,” ArcBest CEO Judy McReynolds said during a call with investors. “This year, our investments in training have not only enabled our workforce to succeed, but we have also seen significant cost savings. For example, the operations experts deployed at our largest ABF facilities have already saved up $7 million this year.”
ArcBest has focused on controlling costs, improving productivity and enhancing service quality over the past year. McReynolds anticipates more savings as those efforts expand in 2025. She stressed the importance of investing in the leadership team and employees to help get a deep bench of talent for the future.
Seth Runser was appointed president last quarter amid other recent leadership changes.
“I’ve had the pleasure of meeting with teams across the organization to identify ways to unlock additional value and drive efficiency,” Runser said during the call. “I’m inspired by our employee engagement and dedication to our customers and our company. We remain committed to managing what’s within our control, delivering industry-leading service and operating our business efficiently.”
Earnings included a $69.1 million after-tax benefit from the reduction in the fair value of a contingent consideration related to a truckload brokerage acquisition from 2021. The acquisition included a potential additional payout based on an earnout provision tied to meeting specific targets through 2025. But no payments were made last year, and so far this year, due to the prolonged soft truckload market.
“Despite the challenging macroenvironment, I am confident in our ability to grow and deliver on our strategic priorities,” Runser said. “My confidence stems from our strong customer relationships, ongoing service improvements and progress on facility expansions and investments in innovation. Our high customer retention underscores the effectiveness of our relationships and satisfaction of our customers.”
Runser added there is a strong pipeline that represents substantial opportunity for top-line growth. The company has been evaluating those opportunities to see what would benefit customers and investors.
“Our managed transportation solution is leading the way with double-digit shipment growth,” Runser said. “This solution helps customers optimize their supply chains, and it’s clear that efficiency-driving solutions are more valued than ever. I’m encouraged to see the demand is growing and the customer agreements we are securing now are more than five times larger on average than those from five years ago.”
Press Release: ArcBest Announces 3Q 2024 Earnings Results – read complete details here, and listen to the live earnings call. https://t.co/f3mhWZcawJ pic.twitter.com/4ESMHb06lT — ArcBest (@ArcBestCorp) November 1, 2024
• Asset-based segment revenue decreased 4.2% to $709.7 million from $741.2 million during the same time last year. Operating income decreased 14.4% to $64 million from $74.8 million. Total tonnage per day decreased 11.3% primarily due to a decrease in weight per shipment, as well as a slight decrease in daily shipments.
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The report noted that prolonged manufacturing sector weakness continued to negatively impact weight-per-shipment metrics. Productivity improvements, pricing momentum and other cost initiatives helped mitigate the impact of the softer market, higher insurance costs and higher labor cost from its union contract rate.
• Asset-light segment revenue decreased 8.1% to $385.3 million from $419.3 million last year. Operating income increased to $84.8 million compared with an operating loss of $3.7 million during the 2023 period.
Segment revenue was impacted by lower revenue per shipment due to a soft rate environment and a higher mix of managed transportation business being smaller shipment sizes. Shipments per day were slightly lower. The report noted that the segment continues to benefit from productivity initiatives, according to the report.
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