ArcBest’s net profit $15.9M for 2Q

Trucker reports 19% revenue dip

ArcBest Corp. on Wednesday reported a second quarter net profit of $15.9 million.

As much of the transportation industry crumpled under the weight of the pandemic, ArcBest adjusted its strategy and made cost-cutting moves to beat analysts expectations.

The Fort Smith-based trucking and logistics firm had earnings of 61 cents per share during the three months that ended June 30. Revenue fell 19% to $627.4 million compared with last year.

“During times like these I feel is when ArcBest shines the brightest,” said Judy McReynolds, chairman, president and chief executive officer, during a Wednesday morning conference call.

In response to declining shipping patterns and tonnage levels, ArcBest went after more spot, truckloadrated and relatively small freight shipments. It also reduced labor and other resources to match business levels. McReynolds said it furloughed about 1,000 workers.

“I am incredibly proud of how our employees

have operated in the face of adversity, especially our frontline teams who come in day-in and day-out, focused on keeping product moving,” she said. ArcBest had 13,000 employees as of December, according to its latest annual investor report.

In the quarter ArcBest’s trucking, or asset-based, business revenue declined to $460.1 million compared to $559.6 million a year ago. Operating income was $21 million, down from $36.2 million in the same quarter last year. Total tonnage and shipments per day fell more than 13% year-over-year, and total billed revenue per hundredweight

fell 4%.

Lower pandemic-related demand also affected the company’s brokerage, or asset-light,

business. Automotive plant closures in April and May and reduced activity among regular customers in the oil and gas, wholesale goods and metal manufacturing sectors, among other things, reduced revenue by 15% to $197.9 million compared to last year. Operating income was $2.1 million, down 30% from $3.1 million a year ago.

FleetNet, ArcBest’s assetlight roadside repair business, reported lower revenue of $46.4 million and operating income of $782,000 compared to last year.

Analysts expected a loss of 3 cents per share, according to a Zacks Consensus Estimate. The trucking and logistics company instead surpassed Wall Street earnings estimates for the fourth

consecutive quarter.

To mitigate effects from the pandemic, ArcBest drew down $180 million from its revolving credit facility and borrowed $45 million from its accounts receivable securitization program. The company said it was looking at options to pay down the debt during the third quarter.

It also cut salaries for nonunion workers and fees paid to ArcBest’s board members by 15% and suspended a nonunion 401(k) match plan, among other cost reductions. This led to reported savings of $15 million in the second quarter.

Company shares fell $1.11, or 3.46% to close Wednesday at $31. Share prices in the past year have been as high as $33.53 and as low as $13.54.