One-time expenses scar ArcBest results; $5.5M lost in quarter
ArcBest Corp. reported a fourth-quarter loss of $5.5 million, citing one-time expenses that hurt net results.
The results, released after markets closed Thursday, missed Wall Street expectations.
The Fort Smith trucking company had revenue of $717.4 million, 7% lower than in the same quarter last year. ArcBest also had a loss of 22 cents per share, down from earnings of 57 cents per share, or $15.3 million, a year ago.
Judy McReynolds, ArcBest’s chairman, president and chief executive officer, said in the report that “while conditions were not as favorable as those seen in 2018, our team succeeded in providing customers with valued expertise, a better experience and the full suite of logistics services they require.”
Adjusted net income, excluding certain one-time charges in both periods, was $14.8 million in the 2019 fourth quarter, down from $28.3 million in 2018.
A Yahoo finance consensus of 10 analysts had ArcBest averaging 42 cents per share before the report was released. Stephens Inc. analyst Jack Atkins last month estimated that it would be lower, about 35 cents per share, in anticipation of strong head winds and a hefty one-time charge.
In a research note, Atkins said ArcBest had negative
tonnage per day with lessthan-truckload tonnage down double digits, “underscoring the continued demand headwinds LTL operators have faced.”
In the asset-based business, revenue was $513.3 million compared with $548.9 million last year. ArcBest reported decreases in total tonnage per day of 8% and total shipments per day of 7%, while total billed revenue per hundredweight went up 2% for the segment. Asset-based income fell 44% to $20.5 million for the period.
ArcBest’s asset-light, or logistics, business took the biggest quarterly hit. The segment reported a loss of $25.4 million, compared with a profit of $7.5 million a year ago. The loss came from a “noncash impairment charge” of $26.5 million that took effect in the fourth quarter. Excluding that, ArcBest had adjusted operating income of $1.1 million. Asset-light revenue was $237 million compared with $243.8 million last year.
A profit-sharing bonus for union-represented employees, the first in the company’s 100-year history, also was distributed in 2019 and worth $5.1 million.
“We thank our ABF employees for their hard work and are proud to distribute this profit-sharing bonus to them,” McReynolds said in remarks. ArcBest is the parent company of ABF Freight, one of the largest less-than-truckload shippers in the country. A five-year contract that calls for annual wage increases, bonuses, health coverage and more vacation time for union workers was signed in the summer of 2018 and a related expense of $37.9 million took effect that year.
“We are confident that the solutions we have in place, and continue to develop and enhance, provide value,” said McReynolds. “As we look ahead, we are accelerating our efforts to deepen and broaden our customer relationships and to increase the effectiveness of our efforts to improve supply chain efficiencies.”
A conference call will be held at 8:30 a.m. today to discuss the quarter and full-year results. It can be accessed online at arcb.com or by dialing (800) 756-3565 .
For the 12 months that ended Dec. 31, revenue totaled $3 billion, down from $3.1 billion a year ago. Net income was $40 million for the period, down 40% from $67.3 million.
ArcBest shares rose 45 cents to close Thursday at $25.63. Shares have traded as high as $41.87 the past 52 weeks and as low as $24.68.