Trucking Fleets Report Mixed Third-Quarter Profits

This story appears in the Nov. 9 print edition of Transport Topics.

Earnings reports from ArcBest Corp., USA Truck and Expeditors International of Washington presented a mixed picture of freight trends in a softening economy.

ArcBest’s net income fell 2.4% to $19.2 million, or 72 cents per share, despite improved results at most businesses as non-operating costs wiped out a small increase in profit from operations.

USA Truck’s net income fell 31% to $2.7 million, or 26 cents, as restructuring and other costs offset a year-over-year rise in profits.

Expeditors International raised net income 16% to $118 million, or 62 cents, despite weakness in some markets.

The results capped a round of earnings in which fleets that reported profit improvement outnumbered those whose earnings fell.

“Softer freight demand amid an increasingly sluggish economy impacted our third-quarter results,” ArcBest CEO Judy McReynolds said.

ArcBest, which ranks No. 12 on the Transport Topics list of the top 100 for-hire carriers in the United States and Canada, improved earnings at less-than-truckload carrier ABF Freight, its largest unit, as well as three of its four non-asset businesses.

ABF Freight operating income, which excludes taxes and interest, improved about 7% to $27.1 million as revenue slipped 2.3% to $511.3 million. Revenue per 100 pounds of freight rose 0.5%, including a fuel surcharge, while shipment count increased and tonnage fell 2.5%.

At the non-asset-based business, results improved within ArcBest’s maintenance, moving and freight-management businesses, which together produced operating income of nearly $5.6 million, up from less than $1 million in the 2014 period. Non-asset-based revenue rose 6% to $211.1 million.

Panther Premium Logistics’ profit was little changed at $2.7 million.

ArcBest’s revenue totaled $709.4 million, down less than 1%.

At USA Truck, profit excluding $2.9 million for restructuring, severance and other costs was 43 cents, the company announced. That compared with 38 cents in last year’s third quarter at USA Truck, which is No. 50 on the for-hire TT100. Revenue there fell almost 20% to $123.5 million.

CEO Tom Glaser said USA Truck reorganized its trucking business to “streamline overhead and realign roles and responsibilities.”

The trucking unit, accounting for about 70% of revenue, improved operating income nearly 15%, but profit dropped nearly 40% at the brokerage business.

Trucking rates per loaded mile rose 4.6%, slower than the 7% pace in the first half. Unseated tractors rose to 7% from 5% in the 2014 period.

Brokerage margins improved at USA Truck to 18.3% from 17.3%.

Expeditors, which ranks No. 5 on the TT Logistics 50, said ocean freight was little changed but didn’t specify an amount while airfreight tonnage rose 3%.

Revenue totaled $1.7 billion, down 3%. Net revenue rose 11% to $570 million.

“In a market where we continue to hear more and more about the overall slowdown in global trade and saw it in our volumes, it is quite pleasing to report another quarter of outstanding financial results,” Expeditors CEO Jeff Musser said.