Net loss widens at Arkansas Best

— A weak first-quarter performance by Arkansas Best Corp. of Fort Smith was made worse by three one-time charges that represented 43 cents of a 71-cent loss per share.

The holding company reported a net loss of $18.16 million for the quarter that ended March 31, compared with a net loss of $12.79 million, or 51 cents per share, for the year-earlier period.

Arkansas Best missed the average net-loss estimate of 18 cents per share from 17 analysts surveyed by Thomson Reuters.

The transportation business reported revenue of $440.87 million, a 1 percent increase compared with $434.93 million in the first quarter of 2011.

Arkansas Best, which operates ABF Freight System Inc., said workers’ compensation claims accounted for 13 cents of the quarter’s loss per share.

The work force at ABF Freight System is represented by the International Brotherhood of Teamsters. The labor union is party to a lawsuit filed by Arkansas Best in November 2010 in the U.S. District Court for the Western District of Arkansas. The dispute stems from concessions granted by Teamsters drivers with YRC Worldwide to the Overland Park, Kan., competitor.

The outcome from a Jan. 11, 2011, appeal remains unknown.

Jack Waldo, a transportation equity analyst with Stephens Inc. in Little Rock, wrote in research note Friday that the weak performance “highlights how crucial it is to the health of [Arkansas Best Corp.] to receive fair treatment from the Teamsters.”

Stephens Inc. performs investment services for Arkansas Best.

“We believe the opportunity to receive some justice is in front of it,” Waldo wrote, “both in its pending legal action ... as well as negotiations of its next” labor contract.

The contract expires in March 2013.

In a conference call with analysts, Judy McReynolds, Arkansas Best’s president and chief executive officer, attributed part of ABF’s profitability issues to difficulties pricing freight.

“We’re at 2008 pricing levels with 2012 costs,” she said, “and we’re working through that.”

During the quarter, the company reported receiving an average $27.60 per hundred pounds of freight, an 11.5 percent increase in the yearover-year comparison.

The company’s total consolidated operating expenses and costs during the January-through-March period were $463.9 million, 1.5 percent higher than the year-ago comparison.

McReynolds told analysts that as the business works through the process of adjusting its financial performance, “it is living with the results and moving on to better revenue opportunities.”

To contact this reporter:

lwhalen@arkansasonline. com

Business, Pages 31 on 04/28/2012

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