ArcBest Reports Earnings Decline, Revenue Gain for Q4
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ArcBest experienced a decline in earnings year-over-year on moderate revenue gains during the fourth quarter of 2022, the company reported Feb. 3.
The Fort Smith, Ark.-based supply chain logistics company posted net income of $37.3 million, or $1.48 per diluted share, for the three months ending Dec. 31. That compared with $65.5 million, $2.47, during the same time the previous year. Total revenue increased by 5% to $1.24 billion from $1.19 billion.
The results were below expectations on Wall Street, which called for $2.64 per share and quarterly revenue of $1.26 billion, according to Zacks Consensus Estimate.
“I would like to begin by acknowledging a few tremendous milestones for ArcBest,” CEO Judy McReynolds said during a call with investors. “First, we exceeded $5 billion in annual revenue for the first time in company history with year-over-year revenue growth of $1.3 billion. We also achieved the highest earnings per share in our company’s history.”
ArcBest also celebrated a century in business this past year. McReynolds noted the road to a hundred years has been paved with resilience, flexibility, innovative thinking, cutting-edge solutions and a commitment to core values.
“ArcBest has flourished over the past century, and we are positioned to continue driving this momentum forward into the next century,” McReynolds said. “We know who we are and because we have stayed true to our values and focused on our strengths, we’ve been able to innovate and successfully navigate enormous amounts of change. Nothing intimidates us.”
ArcBest set records for earnings and revenue for the second straight year. For all of 2022, the company reported net income of $298.2 million, $11.69, on revenue of $5.32 billion. That compares with net income of $213.5 million, $7.98, on revenue of $3.98 billion in 2021.
“Our results remain strong, as does our growth opportunity, regardless of the obstacles facing our industry,” McReynolds said. “We are on track to achieve our long-term financial target of $7 billion to $8 billion in revenue by 2025, and will continue to manage the business in the short term as market conditions evolve.”
McReynolds added that the company has continued to strengthen its competitiveness through its diverse portfolio. She believes the breadth of modes offered to customers allows the company to make the most personalized and strategic decisions to help them grow. She also noted having deep and trusted customer relationships will continue to contribute to ArcBest’s success in any operating environment.
“Throughout 2022, we continued our strategic investments in technology and innovation,” McReynolds said. “Innovation isn’t just a buzzword for our best. It’s embedded throughout our long-term plans and in the way that we approach our daily work.
“We started and completed numerous technology projects in 2022, which allow us to run our business with more precision, better identify issues and quickly address the root causes with the tailored solution.”
Asset-based revenue in Q4 increased 4.1% to $711.4 million from $683.5 million during the same time in 2021. Operating income decreased 9.6% to $75.1 million from $83.1 million. Total shipments for the segment were virtually unchanged at 1.22 million, and billed revenue per shipment increased 2.5% to $571.21 from $557.49.
The report noted business levels in the asset-based segment slowed throughout the fourth quarter. This resulted in moderate year-over-year revenue growth associated with flat total daily shipments combined with a decrease in total freight tonnage and an increase in price.
Market conditions and diminished customer demand contributed to a decrease in the size of shipments moving through the asset-based network. Revenue and operating statistics on less-than-truckload rated shipments were better than those of truckload-rated spot shipments.
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Asset-light revenue increased 5.8% to $572.4 million from $541.2 million year-over-year in Q4. The segment showed an operating loss of $9.6 million compared to operating income of $13.9 million. The loss included a charge of $17.5 million associated with an increase in fair value of the contingent earnout consideration recorded for the MoLo Solutions acquisition in November 2021.
The report noted that revenue levels in the asset-light segment versus the prior-year quarter were impacted by a slowdown in customer shipping volumes, softness in market rates and changes in business mix. That included fewer expedited and international shipments. The segment benefited from growth in managed transportation services and a full quarter of operations from MoLo. Operating margins for the recent quarter were pressured as sequential revenue levels decreased as a result of weakening market conditions and three fewer workdays versus third-quarter 2022.
ArcBest ranks No. 14 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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