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ArcBest Corp. posted gains in net income and revenue in the third quarter as its business rebounded from the economic impact of the coronavirus pandemic.
The Fort Smith, Ark.-based logistics company said third-quarter net income soared 80.4% to $29.4 million from $16.3 million in the same period a year ago. Diluted earnings per share increased to $1.11 from 62 cents.
Revenue rose by 0.9% to $795 million from $788 million.
“I’m incredibly proud of our team for fighting through a pandemic, weathering the associated recession and being ready to respond to increasing demand as our customers’ businesses quickly come back online,” CEO Judy McReynolds said in a conference call with industry analysts and investors Nov. 3.
Although there is a geographic imbalance in how the recovery is taking shape, many of ArcBest’s clients are “returning to more normal shipping patterns,” McReynolds said.
The sequential monthly revenue, shipment and tonnage trends from September to October were among the best in the company’s history, she said.
“As we experienced during the most severe period of the pandemic, our e-commerce business was strong in the third quarter, compared to the previous year,” McReynolds said.
Additionally, she characterized the freight pricing environment as “strong and rational.”
McReynolds said she is encouraged by the potential of a strengthening recovery in the economy’s industrial and manufacturing sector. She listed other positives, including an improved housing industry, as well as recovery in the retail sector and continuing growth in e-commerce.
“What a difference six months have made,” McReynolds said.
The improved economic outlook has allowed the company to hire back 900 of the 1,000 union workers it laid off at the start of the pandemic. It continues to look for drivers in some locations, but it is not hiring in all regions because of the geographic imbalance in economic recovery.
ArcBest also said it would provide discretionary payments to nonunion personnel for the 15% wage reduction it enacted during the second quarter. It also will give a bonus to nonunion hourly employees whose hours were reduced during the same period. The company recognized $7 million of expense in the third quarter while $4 million will be accrued for these payments in the fourth quarter.
Saluting the men and women of the trucking industry who kept America's essential goods flowing during the coronavirus pandemic.
McReynolds said she sees an opportunity next year in shipping potential COVID-19 vaccines.
“We are a source of capacity for that. We are in conversations with different distributors and customers. There is still a lot of unknown of the timing and the plan,” McReynolds said.
McReynolds said technology investments over the past two years helped ArcBest deal with the wild swings in shipping demand over the past several quarters.
Network optimization, for example, helped ArcBest slash empty miles traveled by 16% in the third quarter.
It also has helped the carrier’s city route density and is “allowing the company to more tightly manage its business,” McReynolds said.
ArcBest ended the third quarter with $59 million in cash, up from $41 million at the end of the second quarter.
ArcBest ranks No. 14 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 7 on the less-than-truckload list.
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