ArcBest Reports $1.3 Billion Revenue for Q1
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ArcBest Corp. saw a surge in profits and revenue in the first quarter of 2022, the company reported April 29.
The Fort Smith, Ark.-based logistics company posted net income of $69.6 million, or $2.68 a diluted share, for the three months ending March 31. That compared with $23.4 million, 87 cents, during the same time the previous year.
Total revenue increased by 61% to $1.34 billion from $829.2 million.
“Our three-point strategy remains our North Star for creating sustainable value, shaping how we do business and how we deliver for our customers and employees,” ArcBest CEO Judy McReynolds said during a call with investors April 29. “It also guides how and where we invest resources to ensure we continue to grow our business.”
McReynolds added the first-quarter results are a testament to the merits of the business strategy focusing investments in its workforce, solutions and new technologies. She noted the performance over the last several quarters has enabled the company to continually invest in those areas.
“By dedicating time and resources in new and innovative solutions, we’re able to improve efficiencies, lower costs and overcome operational disruptions,” McReynolds said. “Our work on improving digital channels is a great example of this as we’ve been able to provide customers a better experience through their ability to digitally interact, while lowering our costs. Investments such as this will help drive continued growth for years to come.”
McReynolds is confident that continuing to execute on the strategic plan will advance and accelerate the growth trajectory of the company and ensure ongoing efficiency gains. She noted organic growth initiatives, commitment to new technologies and investments in its workforce will help the company continue to deliver excellent returns for investors.
“We remain grounded in our core business imperatives and continue to invest in these three key areas because we know there is tremendous opportunity in front of us,” McReynolds said. “The last several quarters have proven that the strategy we have in place is the right one to deliver impressive performance and significant returns.”
The results surpassed expectations by investment analysts on Wall Street, which had been looking for $2.08 per share and quarterly revenue of $1.23 billion, according to Zacks Consensus Estimate.
The asset-light segment saw first-quarter revenue increase 116% to $673.7 million from $311.5 million during the same time last year. Operating income increased 145% to $22.8 million from $9.29 million last year. The revenue growth was driven by strong customer demand and higher market rates. The supply chain solutions offered through managed transportation, expedite and international services were meaningful contributors to the segment results as well.
FleetNet America is a subsidiarity of the company focused on leveraging technology to provide fleet maintenance and repair solutions. Its operations helped drive the asset-light segment results by contributing revenue that increased 32% to $78.4 million from $59.2 million last year.
MoLo Solutions also continues to be integrated into the asset-light segment after it was acquired Nov. 1, contributing to increases in truckload brokerage revenue and business levels.
The asset-based segment reported that revenue increased 26.8% to $705.3 million from $556.3 million last year. Operating income increased 166% to $80 million from $30.1 million. The report noted that strength in the pricing environment contributed to revenue growth. Customer demand and market rates remained solid despite inflationary pressures. The company also worked to optimize revenue, network balance, freight mix and shipments which resulted in more efficient utilization of labor and network resources as well as improved profitability.
ABF Freight is a subsidiary of the company focused on less-than-truckload freight. It helped contribute to the asset-based segment results with its average weight per shipment increasing. The company also added more than 600 new employees across key locations during the quarter.
ArcBest announced that its board of directors approved a plan to accelerate the return of capital and drive enhanced value creation for all shareholders April 28. The common stock repurchase program was increased to a total available amount of $75 million. It also increased its quarterly cash dividend by 4 cents to 12 cents per share.
Cowen and Co. said the results handily beat its estimates along with the consensus. The investment bank and financial services company also noted April trends look strong as does the contractual LTL pricing environment.
“Our raised assumptions also come on the heels of ARCB increasing its quarterly dividend a whopping 50% to $0.48 per share annually,” Cowen analyst Jason Seidl wrote in a report. “It also announced a new share repurchase agreement of up to $75mm. We forecast that ARCB will be able to service both its dividend and share repurchase (if they so choose) obligations via cash generated from operations.”
ArcBest ranks No. 15 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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