ArcBest Corp. of Fort Smith (Nasdaq: ARCB) on Friday reported third-quarter income of $100.3 million, a large increase from $34.3 million a year ago.
The large jump was because of a reduction in payouts related to the company’s 2021 acquisition of MoLo Solutions of Chicago. The company said the $235 million acquisition included an “earnout provision” requiring additional payments if certain targets were reached. ArcBest said no payments were made in 2023 and none were expected to be made in 2024.
The elimination of payments resulted in a $91.9 million pre-tax reduction and $69.1 million after-tax reduction in expenses.
Adjusted earnings came to $1.64 per share, which did not meet Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.84 per share.
Revenue in the third quarter was $1.06 billion, down from $1.13 billion in the same quarter a year ago and below Street forecasts. Three analysts surveyed by Zacks expected $1.07 billion.
The company’s asset division reported quarterly revenue of $709.7 million, down from $741.2 million a year ago. Operating income was $64 million, down from $74.8 million.
The division reported revenue per shipment of $551.34, down from $574.95. Daily shipments were down less than 1% but weight per shipment dropped 10.7%.
The asset-light division reported revenue of $386.3 million, down from $19.3 million. Operating income was $84.8 million, a MoLo-related improvement from a loss of $3.7 million a year ago.
Revenue per shipment in the division dropped 8.9%.
“Over the past year, we have made substantial strides in controlling costs, improving productivity, and enhancing our service quality,” ArcBest CEO Judy McReynolds said in a statement.
Shares of ArcBest fell nearly 5% on Friday to around $99.26. Year to date, shares were down about 18%.
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