Icon (Close Menu)

Logout

ArcBest Profit Plunges 61% in Q2

2 min read

ArcBest Corp. (Nasdaq: ARCB) of Fort Smith on Friday reported fairly steady revenue but sharply declining profit in the second quarter.

Net income was $40.4 million, down 60.5% from $102.5 million in the same period a year ago. Earnings adjusted for non-recurring gains and to account for discontinued operations came to $1.54 per share.

The results missed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $2.05 per share.

The freight transportation and logistics company reported revenue of $1.1 billion, down from $1.3 billion in the same quarter a year ago and just below Wall Street expectations. Three analysts surveyed by Zacks expected $1.11 billion.

The company said the revenue decrease in the second quarter was primarily due to a general slowing of core customer order frequency. ArcBest also smaller average shipment quantities and less fuel surcharge revenue based on lower diesel fuel prices.

ArcBest’s asset division reported revenue of $722 million, down from $802.6 million in the same quarter a year ago. Operating income was $43.3 million, down from $116.7 million.

The division reported an increase in total shipments delivered, from 1.28 million to 1.33 million, but revenue per shipment dropped 13.8% from $632.43 to $545.35.

The company’s asset-light division, formerly comprised of its logistical segment ArcBest and its maintenance division FleetNet, reported revenue of $409.8 million, down from $549.7 million. Operating income was $13.2 million, down from $27.5 million, as the division’s revenue per shipment dropped 30% from the previous quarter.

ArcBest sold FleetNet for $100 million in February to Cox Automotive Mobility Solutions Inc., a division of Cox Enterprises Inc. of Atlanta.

Asset-light results were impacted by lower average revenue per shipment as a result of a softer market environment. Despite the increase in daily shipments, lower shipment rates and margins hit profitability. During the second quarter of 2022, the division benefited from higher market rates on committed business, which drove record profitability.

ArcBest said it implemented measures during the quarter to reduce costs for labor and outside services. It resulted in a $3 million, or 5%, quarterly decrease in operating expenses. Operating expenses were also lower on an annual basis, falling from $1.2 billion to $1.1 billion.

The Associated Press contributed information to this report.

Send this to a friend