by Lance Turner
Posted 4/30/2013 07:19 am
Updated 12 months ago
Arkansas Best Corp. of Fort Smith on Tuesday reported a first-quarter net loss of $13.4 million or 52 cents per share on revenue of $520.7 million, up from $440.9 million in the same quarter last year.
The trucking company's first-quarter loss wasn't as severe as its was in the first quarter of 2012, when the company reported a loss of $18.2 million or 71 cents per share. But its first-quarter earnings per share figure missed analysts estimates by 13 cents, according to Briefing.com.
In its report (PDF), the company cited "encouraging trends in its emerging businesses." It said year-over-year revenue and tonnage growth at its less-than-truckload carrier subsidiary, ABF Freight System Inc., were offset by "higher wage and benefit costs for employees represented by the International Brotherhood of Teamsters."
The company also noted that results from the first quarter of 2012 included the effects of an "unusually low" corporate tax benefit rate and "unusually high" workers' compensation claims costs, which increased last year's first quarter net loss by 31 cents per share.
Arkansas Best cited "encouraging" results in its emerging businesses, including frieght brokerage, vehicle roadside and preventative maintenance, and Panther Expedited Services Inc., a company it bought last year that provides expedited transportation and premium logistics services.
"First quarter revenue and operating income at our emerging businesses reflected growth and improvement as we invested heavily in these businesses during 2012," Judy R. McReynolds, Arkansas Best's president and CEO, said in a news release.
"They represent a critical piece of Arkansas Best’s strategy to achieve sustained profitability. The investments made so far have improved the financial performance of these subsidiaries and strengthened their service offerings and their ability, both individually and through significant cross-selling opportunities, to better serve customers with full supply-chain solutions," she said.
Meanwhile, McReynolds said results from the company's largest subsidiary, ABF Freight, were weighed down by its "high-cost structure," underscoring "the need for a more rational labor agreement that reflects the increasingly competitive [less-than-truckload] industry.
As Arkansas Business reported Monday, ABF Freight has extended its current contract with the Teamsters union through the end of May while the two parties try to reach a long-term agreement that ABF insists must include wage concessions. The company said it is trying to improve on a contract that "produced $250 million in losses since 2009."
While ABF released no details of its proposals, the Teamsters National ABF Negotiating Committee said in a competing statement that ABF was "seeking an across-the-board 6.5 percent wage reduction as well as reductions in both the scope and level of health and welfare coverage available to employees."
On Tuesday, McReynolds called a new labor contract with more competitive costs "a critical element" of ABF's standing among other LTL companies, and said the negotiating teams are "making progress" on a new deal.
"After months of hard work and a second extension of contract talks through May 31, the negotiating teams continue to make progress on developing a contract agreement for our Teamster-represented employees that is expected to provide ABF greater operational flexibility and lower costs in order to effectively compete in the future," she said.