ArcBest Corp. on Thursday reported net income of $10 million in the first quarter of 2018, an improvement from a loss of $7.4 million during the same quarter a year ago.
The Fort Smith company posted earnings of 37 cents per share after a loss of 29 cents per share during the first quarter of 2017. ArcBest's revenue of $700 million in the quarter also was a 7.5 percent increase from $651.1 million last year.
The results topped analyst expectations of a loss of 7 cents per share and revenue of $691.2 million.
ArcBest chief executive Judy McReynolds attributed the first-quarter results to "strong market demand" for the company's services as well as "purposeful yield management." The company also said it benefited from a $2.6 million reduction in income tax liabilities resulting from the Tax Reform Act.
"Conditions in the shipping and logistics market for the first quarter were some of the strongest we have seen in some time for this typically, seasonally, slow period of the year," McReynolds said during a conference call. "This favorable environment, and our focus on securing appropriate value for our services, led to the positive first quarter results."
ArcBest reported its first-quarter earnings after the markets closed.
Company stock closed Thursday trading at $36.95 per share, up 40 cents.
ABF Freight, the company's asset-based segment, reported a 4 percent increase in quarterly revenue to $482.1 million. Operating income in the segment was $13.4 million, which compared with an operating loss of $8.3 million last year.
The company cited improved economic trends for the results and said the business benefited from increases in weight per shipment even though shipments per day decreased 9.4 percent and tonnage fell 3.7 percent. ArcBest also was able to implement rate increases for its services, which the company said led to significant gains in revenue per shipment.
"Tonnage and shipment statistics in the first quarter and through April 2018 continue to reflect the effects of the pricing actions we've taken," McReynolds said. "Though the business level reductions we've experienced are not surprising, our first quarter financial results illustrate the positive trade-offs we have made in better aligning customer pricing with a high level of service and cargo handling."
The company's asset-light segment reported revenue of $229.7 million, which was a 19 percent increase from the first quarter of 2017. The company posted $4.7 million in operating income compared with $2.1 million a year ago.
ArcBest said the revenue growth in the business was the result of revenue-per-shipment growth that was attributed to tight supply in the industry along with strong customer demand. McReynolds said general economic trends were favorable throughout the quarter and ArcBest expects those to continue in 2018.
Last month, ArcBest reached a tentative agreement with the Teamsters on a 63-month contract for its ABF Freight workers. The agreement included wage increases for drivers in each year of the contract, one-time bonuses for full-time workers and the restoration of a vacation week.
Ratification remains subject to a vote among ABF Freight's union workers. The voting period ended Tuesday and votes were being tallied Thursday. The company said it was awaiting the results.
"We were pleased to reach a [tentative] agreement that is affordable to the company and fair to our employees," McReynolds said. "We will provide additional information on the results as they become available."
Business on 05/11/2018