ArcBest Reports $1 Billion Revenue for Q1
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ArcBest Corp. saw its bottom line swing from a profit to a loss and posted a decline in revenue during the first quarter of 2024 on the heels of market softness and weather-related delays, the company reported April 30.
The Fort Smith, Ark.-based logistics company reported a net loss from continuing operations of $2.91 million, or negative 12 cents a diluted share, for the three months ending March 31. That compared to a gain of $18.8 million, 75 cents, during the same time the previous year. Total revenue from continuing operations decreased by 6.3% to $1.04 billion from $1.11 billion.
“We believe the core of ArcBest’s success is our people, and our people rose to the occasion this quarter as we navigated continued market softness and weather events,” ArcBest CEO Judy McReynolds said during a call with investors. “Despite these challenges, we delivered solid first-quarter results, including generating $1 billion in revenue and nearly $43 million in non-GAAP operating income. Our focus remains on efficiently running our business, delivering a high-quality service that our customers value, and effectively managing costs.”
ArcBest ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
McReynolds said the company remains focused on its three-point strategy of accelerating growth, increasing efficiency and driving innovation, but noted that delivering high-quality service to customers and effectively managing costs also remains at the forefront.
“Demand for our services remains strong, with a solid pipeline that has grown by 35% since the start of the year as ArcBest continues to act as a trusted adviser to customers, helping them solve their logistics challenges,” McReynolds said. “We have seen positive trends in our core asset-based business with daily shipments and tonnage both increasing over last year. Our asset-light shipment volume has grown significantly with double-digit growth in the managed transportation solution.”
She added, “Despite severe weather conditions in January, we achieved the highest on-time performance and network efficiency since 2021. We continue to make strategic investments to accelerate growth and increase operational efficiency. For instance, the opening of a new facility, in Olathe, Kan., allowed us to relocate city operations from the Kansas City Distribution Center, leading to a significant increase in productivity.”
As for the company’s focus on innovation, ArcBest announced toward the end of the quarter that it would be shifting its focus on autonomous equipment. The company noted that its Q1 net loss from continuing operations included a $21.6 million noncash impairment charge associated with its equity investment in remote-controlled vehicle provider Phantom Auto, which ceased operations during the quarter.
“In January of 2022, ArcBest announced a $25 million investment in Phantom Auto as a part of a transformative initiative centered around remote-operated autonomous forklifts developed for use in ArcBest customer locations,” McReynolds said. “Since our March launch of the Vaux Smart Autonomy solution, we’ve seen significant customer interest, and we currently have pilots underway with key customers. These pilots are leveraging our own technology solution for any required tele-operations, instead of the Phantom Auto solution we previously used.”
Broken down by division, ArcBest’s asset-based segment Q1 revenue dropped 3.8% to $671.5 million from $697.8 million. Total shipments per day decreased by 6.2%, but that was somewhat offset by total billed revenue per hundredweight increasing 15.6%. An improved freight mix, higher pricing on transactional shipments and an increase in contract renewal helped pricing momentum through the quarter, the company said, but the segment was affected by weather in January and fewer workdays in March. Operating income increased 12.6% to $53.5 million from $47.5 million last year.
Asset-light segment revenue decreased 9.5% to $396.4 million compared with $438.1 million a year ago. The results were impacted by lower revenue per shipment and reduced margins associated with changes in business mix and the soft rate environment, ArcBest said. Increased productivity helped mitigate some of the market softness and shipments per day grew by 13.6% as the company added new customers. But profitability was still impacted by lower rates and weaker truckload service margins. The segment posted a wider operating loss of $15.3 million, compared with an operating loss of $14.1 million a year ago.
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