Trucking and logistics provider ArcBest on Friday reported third quarter numbers showing net income improved a little more than 14.5% to $14.8 million, or 56 cents per share, 2 cents below Wall Street expectations.
Revenue was $744.3 million compared to third quarter 2016 revenue of $713.9 million.
Third quarter 2017 operating income was $24.3 million compared to operating income of $20.4 million last year.
“Our enhanced market approach, tighter capacity and a generally favorable pricing environment all contributed to improved third quarter results,” said ArcBest Chairman, President and CEO Judy R. McReynolds. “Our expedited business was particularly strong, and on the asset-based side, we continue to make progress on the implementation of our space-based pricing initiative, which took effect Aug 1.”
She said the company experienced some negative effects in its asset-based business from the hurricanes that hit the southern U.S. and Puerto Rico.
ArcBest’s asset-based business, which includes less-than-truckload carrier ABF Freight, reported revenue of $517.4 million in the most recent quarter compared to $509 million, a per-day increase of 4.1 percent.
Other segment highlights include:
- Tonnage per day decrease of 3%
- Shipments per day decrease 1.4%
- Total billed revenue per hundredweight increased 6.6% that was positively impacted by changes in shipment profile and higher fuel surcharges
- Operating income of $21.8 million and an operating ratio of 95.8% compared to operating income of $18.1 million and an operating ratio of 96.5 %
“In the midst of a solid LTL pricing environment, yield management actions implemented throughout 2017, including this quarter’s space-based pricing initiative, resulted in higher revenue per hundredweight and improved revenue per shipment,” the company said in a statement. “Though freight tonnage was lower, primarily due to purposeful reductions in asset-based truckload-rated shipments, monthly total weight per shipment trends improved throughout the quarter and LTL weight per shipment increased slightly. In addition, one and a half fewer working days in the quarter impacted operating results and comparisons to previous periods.”
In the company’s asset-light segment, revenue of $235.3 million in the most recent quarter compared to $210.1 million a year earlier while operating income of $8.5 million compared to operating income of $6.4 million.
“The increase in ArcBest’s asset-light revenue and operating income was driven by solid growth in expedite services and year-over-year business increases associated with the early September 2016 acquisition of a dedicated truckload company,” the company said. “Combined with a slight increase in average daily expedite shipments, the increase in expedite revenue was the result of significant growth in average shipment revenue associated with positive changes in equipment mix and longer average length of haul.”
It also reported truckload revenue improved slightly as a result of increased revenue per shipment despite lower shipment counts. Truckload net revenue margins were below the same period last year due to the challenges of implementing customer rate increases in line with rising purchased transportation costs associated with tighter capacity in the truckload marketplace.
YRC Profit Falls by Nearly 78.5%
The mainly less-than-truckload operation YRC Worldwide reported on Thursday its third quarter profit fell by nearly 78.5% despite slightly higher revenue.
The Kansas-headquartered company reported net income of $3 million, or 9 cents per share, compared to net income of $13.9 million, or 42 cents per share, for the same time a year earlier. The earnings per share were well short of a consensus estimate from analysts.
Revenue in the most recent quarter was $1.251 billion, almost 2.5% better than during the third quarter of 2016.
Despite the big decline in profits, operating income improved to 40.1 million from $38.8 million.
Third quarter 2017 tonnage per day increased 0.7% at YRC Freight and 4% at the company’s regional segment compared to third quarter 2016.
At YRC Freight, including fuel surcharge, third quarter 2017 revenue per hundredweight increased 3.4% and revenue per shipment increased 3.8% when compared to the same period in 2016. Excluding fuel surcharge, revenue per hundredweight increased 2.4% and revenue per shipment increased 2.8%.
At the regional segment, including fuel surcharge, third quarter 2017 revenue per hundredweight increased 1.3% and revenue per shipment increased 4.1% when compared to the same period in 2016. Excluding fuel surcharge, revenue per hundredweight increased 0.3% and revenue per shipment increased by 3.2%.
As of Sept. 30, the company's outstanding debt was $962.4 million, a decrease of $93 million compared to $1.055 billion a year earlier.
"Despite weather and operational challenges in the third quarter, YRC Freight continued to improve its revenue per hundredweight and reported its highest year-over-year percentage increase in nearly three years in addition to positive year-over-year tonnage per day for the fourth consecutive quarter," said James Welch, CEO. "Collectively, the regional carriers reported their largest increase in year-over-year tonnage per day since the second quarter 2014.”
Looking ahead, Welch said the economic environment continues to strengthen and the company is optimistic about closing out 2017 with improved financial performance compared to a year ago.
“We believe YRC Freight, Reddaway, Holland and New Penn will be positioned for tighter capacity due to the recovery and restoration efforts from the hurricanes and the ELD mandate. Refreshing our fleet remains a priority and by the first quarter 2018 we expect to have taken delivery of more than 3,700 tractors and more than 7,300 trailers since the beginning of 2015,” he said. “Lastly, this month YRC Freight is implementing a significant change of operations that includes transitioning eight terminals to regional distribution centers which is expected to help strengthen customer service and reliability while adding capacity and reducing cost within its network.”
USA Truck Bounces Back from Small Loss to Small Profit
Meantime, trucking and logistics provider USA Truck Inc. on Thursday also reported it moved back into the black, but just barely, by reporting net income of $409 thousand, or 5 cents per share, compared to a loss a year earlier of $734 thousand, or 9 cents per share.
The per share performance was better than an expected loss of 5 cents per share from analysts.
Consolidated operating revenue was $114.2 million compared to $105.5 million for the prior year period. Base revenue, which excludes fuel surcharge revenue, was $102.4 million compared to $94.7 million for the 2016 period.
“We believe these results show that we are capable of making and keeping our commitments to progress. We expect to improve results through disciplined network management and pricing, enhanced partnership with customers, and improved execution in our day-to-day operations, in conjunction with our ongoing safety initiatives,” said President and CEO James Reed. “While we are pleased to report positive net income, it is important for all of us to recognize that the turnaround is still in its beginning stages and our expectations are for further improvement throughout 2018.”
USA’s trucking segment reported operating revenue increased $3.1 million, or 4.2%, year-over-year, to $76.5 million, compared to third quarter of 2016. This was primarily due to a 7.6% increase in base revenue per loaded mile, partially offset by a 4.2% decrease in loaded miles, according to the company.
Trucking’s operating loss of $1.2 million for the 2017 period compared to $1.5 million for the 2016 period. USA Truck said this loss was primarily driven by the combination of rising fuel costs throughout the quarter, elevated driver recruiting expenses, and underutilization of its tractors relative to desired levels, however, these headwinds were offset by improving its yield, as it continues to work on refining the company’s network.
USAT Logistics' operational performance continued to improve throughout the third quarter of the year, according to the company. Operating revenue was $37.8 million, up 17.7% versus a year earlier and up 5.5% from the second quarter of 2017. Gross margin increased 130 basis points to 20.2% compared to 18.9% in 3Q16.
USAT Logistics saw higher quarterly volumes when compared to the same period last year, driven primarily by increased spot market freight due to favorable movement in industry demand relative to capacity, according to USA Truck.
“While this market dynamic has been a positive one for USAT Logistics, we remain committed to our plan of building strong long-term customer relationships through superior service and competitive pricing,” the company said in a statement.