LITTLE ROCK — Arkansas Best Corp. on Friday said higher average freight rates during the October through December period contributed to a profitable fourth quarter, but the company missed earnings estimates and shares plunged Friday.
The company also announced a minor restructuring of its financial reporting and will now break out results for three new segments.
For the quarter that ended Dec. 31, Arkansas Best posted net income of $1.4 million, or 5 cents per share, compared with a net loss of $3.11 million, or 12 cents per share, in the same year-ago period.
The company that operates ABF Freight System Inc. missed the average earnings estimate of 24 cents per share from 18 analysts surveyed by Thomson Reuters. ABF is a less-than-truckload carrier, which means it hauls shipments that combine freight from multiple customers in each trailer.
Arkansas Best, a Fort Smith-based holding company, reported revenue of $463.24 million, which represented a 5 percent increase compared with $441.1 million in the fourth quarter of 2010.
Arkansas Best reported earnings before the market opened. Wall Street quickly responded by sending shares down.
The stock price ended the day down $3.37, or 14.98 percent, at $19.13 per share in Friday trading.
Its shares have traded as high as $27.44 and as low as $14.22.
The company also released year-end results. It posted net income of $6.16 million, or $23 cents per share, on $1.91 billion in revenue at the end of 2011, compared with a net loss of $32.69 million, or $1.30 per share, on $1.66 billion in revenue for year-end 2010.
Financial results for Arkansas Best were broken out for more than its trucking subsidiary, ABF Freight System Inc.
For the first time the company added freight brokerage services FleetNet, which is a roadside assistance service; and a special services unit that includes consumer and military-household and corporate moving.
“This decision is necessitated by accounting rules that require public disclosure of business lines meeting certain operating profit thresholds,” the company said in a news release.
Jack Waldo, a transportation equity analyst with Stephens Inc. in Little Rock, said the segmentation was one of the more interesting parts of the company’s earnings presentation, because it showed that Arkansas Best’s nontrucking units were generating higher returns.
“If I were an Arkansas Best trucking employee and saw that there were greater returns in nonasset operating segments, I think I’d work hard to generate that same type of return,” Waldo said. “And to do that will take help from the union.”
Stephens performs investment services for Arkansas Best.
Other reporting changes announced Friday during the fourth quarter conference call included how Arkansas Best reports tonnage.
The company said it is no longer including freight generated by its brokerage subsidiary in its total tonnage figure, Judy McReynolds, the company’s president and chief executive officer, said.
Arkansas Best reported an 8.3 percent decline in tonnage, with 730,426 tons hauled by its trucking subsidiaries during the fourth quarter, down from a revised 796,922 tons in the fourth quarter of 2010.
McReynolds told analysts that because of the change, tonnage in the year-overyear comparison is “slightly worse than it otherwise would be.”
During the quarter, Arkansas Best reported a 13 percent increase in its average billed rate of $28.01 per one hundred pounds.
Business, Pages 31 on 01/28/2012