Fleet Management

Earnings Watch: ArcBest Profit Falls, Celadon Reports Loss

November 03, 2016

By Evan Lockridge

SHARING TOOLS        | Print Subscribe

The parent of a company primarily known for its less-than-truckload fleet saw its profit fall by nearly a third while a separate carrier that provides long-haul truckload and other services moved into the red, according to newly released earnings numbers.  

ArcBest Corp. (Nasdaq: ARCB) reported third quarter 2016 net income of $12.9 million, or 49 cents per share, compared to third quarter 2015 net income of $19.2 million, or 72 cents per share.

Revenue in the latest quarter totaled $713.9 million compared to $709.4 million a year earlier. Operating income declined to $20.4 million from $33.4 million for the Arkansas-based operation.

According to the company, the continued softness in the U.S. industrial economy affected freight tonnage levels and profit margins at its LTL fleet, ABF Freight. ArcBest’s asset-light logistics companies were highlighted by improved revenue and operating profit at Panther.

“As we have seen throughout the year, pricing in the less-than-truckload sector remained rational despite a soft economic environment and we continued to experience benefits from investments in new equipment,” said ArcBest chairman, president and CEO Judy McReynolds.

ArcBest’s freight transportation segment, which includes ABF Freight, reported revenue of $509.5 million compared to $511.3 million in third quarter 2015, a slight per-day decrease. Year-over-year reductions in fuel surcharge associated with lower diesel fuel prices contributed to ABF Freight’s reduced revenue compared to last year, according to the company. Operating income was $18.1 million versus $26.6 million a year earlier.

Tonnage per day fell 2.8% compared to third quarter 2015 while shipments per day increased 1.6%. Total billed revenue per hundredweight increased by 2.8%, which ArcBest said came despite lower fuel surcharges, reflecting both price increases and changes in total shipment profile compared to the prior year. Excluding fuel surcharge, the percentage increase on ABF Freight’s traditional LTL freight was in the mid-single digits.

The company’s asset-light operations, which includes Panther, had revenue of $217.9 million compared to $211.1 million in third quarter 2015 while operating income fell $2 million to $6.5 million.

Celadon Slips Into The Red 

At Celadon Group Inc. (NYSE: CGI), the picture was not as good as net income decreased $14.3 million for a net loss of $2.9 million as earnings share fell to a loss of 10 cents from 41 cents for the same quarter last year. 

Revenue for the quarter decreased 0.4%, to $265 million. Freight revenue, which excludes fuel surcharges, increased 1.6% to $241.5 million. Operating income decreased $22.5 million to an operating loss of $1.3 million.

The decline in net income and earnings per share for the September 2016 quarter was attributable primarily to three factors, according to the Indiana-based fleet. The largest component was an approximately $12 million decline in gain on disposition of equipment. Celadon said this was related to discontinuing sales of new equipment by a subsidiary, which sold zero new units in the September 2016 quarter, sale of fewer tractors and trailers formerly used in its trucking operations, and lower gain on sale per unit due to a weak market for used revenue equipment.

“We also saw increased equipment costs, largely related to rents associated with our sale leaseback transaction that was completed in the June 2016 quarter,” the company said in a statement. “Finally, lower revenue per total mile, excluding fuel surcharges, resulting from a competitive market, less effectively covered our fixed costs, and generated lower variable cost margin.”

Celadon also characterized the trucking environment during the third quarter as having lackluster freight volumes, plentiful industry-wide capacity in most markets, and significant rate pressure from customers during contractual negotiations. 

The company’s seated count compared to the year earlier quarter declined 71 trucks, but increased by 63 trucks over the second quarter of this year. 

“Although we saw a sequential increase, the company truck fleet decreased by 38 trucks, and the owner operator fleet increased by 101,” Celadon said. “We intend to focus on growing our owner-operator seated count and sizing our company truck fleet to match the level of freight that justifies investment in the additional assets.”

Comment On This Story

Name:  
Email:  
Comment: (Maximum 2000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

Newsletter

We offer e-newsletters that deliver targeted news and information for the entire fleet industry.

GotQuestions?
sponsored by
sponsor logo

ELDs and Telematics

Scott Sutarik from Geotab will answer your questions and challenges

View All
GotQuestions?

Sleeper Cab Power

Steve Carlson from Xantrex will answer your questions and challenges

View All