ArcBest Corp. ended the year with a strong fourth quarter because of better less-than-truckload pricing and lower expenses than one year ago.
The Fort Smith, Ark.-based company generated $36.6 million in earnings for the final three months of 2017, or $1.37 per share. However, like other U.S. companies, the results included a benefit from the Tax Cuts and Jobs Act, totaling $24.5 million for ArcBest. In the fourth quarter of 2016, ArcBest only had $1.6 million in earnings or 6 cents per share.
Adjusted earnings were $11.2 million or 42 cents, better than the $7.3 million or 28 cents in the same quarter of 2016.
Revenue increased 3.3% to $710.7 million.
For the entire year, ArcBest’s revenue rose about $100 million to $2.8 billion. Earnings climbed to $59.7 million or $2.25, compared with $18.7 million or 71 cents in 2016.
“We began 2017 with an aggressive plan to implement our enhanced market approach,” CEO Judy McReynolds said in a statement. “We undertook a number of significant actions to improve our pricing and ensure that we are adequately compensated for the value we provide customers, particularly in our asset-based business.
“We are pleased with the results of these actions to date, which are in line with our expectations, and are confident we have the right pricing strategy going forward.”
Asset-based revenue increased 3.1% year-over-year in the fourth quarter to $497 million. Tonnage per day decreased 4.7% to 12,350, and shipments per day fell 8.1% to 19,763. Nevertheless, ArcBest ended the quarter with better results because revenue per 100 pounds of freight rose 7.6% to $32.34, and revenue per shipment jumped nearly 12% to $404.25. As a result, operating income jumped from $7.1 million to $18 million.
“The fourth-quarter emphasis on securing compensatory pricing contributed to reductions in shipment and tonnage levels despite a healthy economic environment and tightened industry capacity,” the company wrote. “Cost controls and focused workforce management contributed to overall operational labor savings that were somewhat offset by higher union health, welfare and pension expense. Reduced costs for outside resources, including city cartage and local rental equipment, also contributed positively to fourth-quarter results.”
In the logistics business, revenue climbed 5.2% to $222.2 million and the company recovered from a $900,000 operating loss in late 2016 to make $5.2 million in operating income.
“ArcBest’s asset-light revenue increased primarily as a result of strong revenue-per-shipment growth in expedited and truckload related to higher customer demand and tightened capacity in the marketplace,” the company noted. “The revenue growth in these portions of the asset-light business occurred despite shipment count reductions.”
ArcBest ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.