by Lance Turner
Posted 11/1/2012 07:43 am
Updated 7 months ago
Arkansas Best Corp. of Fort Smith on Thursday reported third-quarter net income of $6.5 million, or 24 cents per share, down 47 percent from $12.3 million, or 46 cents per share, during the same quarter last year.
The decline came even as the trucking and logistics firm (Nasdaq: ABFS) posted operating revenue of $577.5 million, up 13 percent from the same quarter last year. Arkansas Best's earnings per share result missed analysts' expectations of 26 cents per share.
"Arkansas Best’s results reflect weakness in the economy that contributed to reduced customer business levels and lower profitability at ABF," Arkansas Best President and CEO Judy R. McReynolds said in a news release (PDF). "The slowing business environment also reduced the demand for expedited services at Panther. However, at our emerging non-asset-based companies, we are encouraged by the continuation of strong revenue and improving profitability trends in the midst of a tenuous economy."
The company reported that the segment containing its largest subdiary, ABF Freight Systems Inc., recorded $8.4 million in third-quarter net income, down 52 percent from the same quarter last year.
McReynolds said that during the quarter, business levels at its ABF Freight System Inc. company were below the same quarter last year by 1.4 percent. She said the drop came amid a "soft economic environment" and business declines that came as a result of price changes ABF implemented last year.
"ABF's recent yield improvement reflects positive retention of the late June general rate increase and better price levels on contractual agreements that renewed during the quarter," she said. "ABF has added new, profitable customer relationships and remains focused on improving existing account pricing and managing its resources to available freight levels."
The third quarter was also the first full quarter for Arkansas Best's new Panther Expedited Services Inc. company. Arkansas Best purchased the company in June from Fenway Partners LLC for $180 million. The deal was McReynolds' first acquisition as CEO.
According to the company, the segment that includes the Panther subsidiary made $804,000 during the quarter.
On Thursday, McReynolds said Panther's results were affected by "a slower macroeconomic environment." She said that while customer loads increased, the availability of business varied. But she said the company is excited about Panther's future.
"We have identified opportunities for Panther to work together with our other subsidiaries to better serve customers, with a number of these opportunities already yielding positive benefits," she said. "Moving forward, we believe the addition of Panther will be a key element in our development into a comprehensive logistics resource for our customers."
Arkansas Best said its the segment that includes its FreightValue subsidiary recorded $872,000 in third-quarter net income, down 13 percent from the same time last year. The segment including its Albert Companies Inc. and Moving Solutions Inc. subsidiaries recorded $1.4 million in net income, down 15 percent from last year.