Freight transportation and logistics provider ArcBest beat first-quarter expectations as volumes stepped higher across the enterprise.
ArcBest (NASDAQ: ARCB) reported a headline net loss of $1 million, or 5 cents per share, Tuesday before the market opened. Excluding items considered nonrecurring, adjusted earnings per share of 32 cents were 19 cents worse year over year, but 3 cents ahead of consensus.
Consolidated revenue was up 3% y/y to $999 million and in line with consensus.
Table: ArcBest’s key performance indicators
The asset-based unit, which includes LTL subsidiary ABF Freight, recorded revenue of $655 million, a 1% y/y increase (2% higher on a per-day basis). Tonnage per day increased 6.5% y/y as shipments were up 2% and weight per shipment was 5% higher. Daily tonnage came in above the company’s forecast for a 4% to 5% y/y increase. It had easy prior-year tonnage comps to start the quarter (negative-9.2% in January), but the comps were closer to flat to close the period, turning positive in April (plus-3.6%).
Revenue per hundredweight (yield) slid 4% in the period, largely due to the increase in shipment weights. Revenue per shipment was up 1%. The company said “pricing remains rational,” noting contractual rate increases came in 6.3% higher in the quarter (up 10.3% on a two-year-stacked comparison).
So far in April, tonnage per day is up 5% y/y as shipments are down 1% and weight per shipment is up 6%. Revenue per day is 9% higher y/y, largely due to a 10% increase in revenue per shipment (yield is down by a low-single-digit percentage, excluding fuel surcharges).
(April tonnage is 8.6% higher on a two-year-stacked comparison.)
The unit recorded a 97.3% adjusted operating ratio (inverse of operating margin), 140 basis points worse y/y and 110 bps worse than the fourth quarter. The result was in line with management’s guidance for 100 to 200 bps of sequential deterioration.
The company forecast sequential OR improvement of 400 to 500 bps in the second quarter, 100 bps better than typical seasonality at the midpoint of the range. That implies a 92.8% OR, which would be flat y/y.
The asset-light segment, which includes truck brokerage, reported adjusted operating income of $2.8 million, which was above the high end of management’s “up-to-$2-million” guidance. Revenue was 6% higher in the first quarter, but revenue per day is running 24% higher y/y so far in April. Daily shipments are up 17% y/y in the month due to growth in its managed transportation offering, with higher fuel costs producing a 7% increase in revenue per shipment.
Adjusted operating income of $1 million to $3 million is forecast for the second quarter.
The company will host a call at 9:30 a.m. EDT on Tuesday to discuss first-quarter results.
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