ArcBest Reports Earnings

ArcBest (ARCB) missed profit expectations in its second-quarter earnings report. This earnings report follows a trend of asset/asset-light logistics companies trying to navigate a soft freight market.

ArcBest delivered a net income of $46.8 million/ $1.96 per share.

Revenue is down 2.3% to $1.o8 billion. ArcBest cited a, "lower revenue per shipment and reduced margins associated with a soft rate environment".

I looked at their official earnings report and found some interesting numbers from both their asset-based and asset-light side. (https://arcb.com/about/news-events/press-releases/arcbest-announces-second-quarter-2024-results)

Official Report:

Asset-based

Second Quarter 2024 Versus Second Quarter 2023

• Revenue of $712.7 million compared to $722.0 million, a per-day decrease of 2.1 percent.
• Total tonnage per day decrease of 20.3 percent.
• Total shipments per day decrease of 4.8 percent.
• Total billed revenue per hundredweight increase of 23.0 percent.
• Core daily shipments increase of 14 percent and tonnage increase of 11 percent.
• Operating income of $72.8 million and an operating ratio of 89.8 percent, on both a GAAP and non-GAAP basis, compared to prior-year GAAP operating income of $43.3 million and an operating ratio of 94.0 percent and prior-year non-GAAP operating income of $51.7 million and an operating ratio of 92.8 percent

"On a non-GAAP basis, the Asset‑Based segment delivered its second-best operating income result for a second quarter in company history."

Asset-Light

Second Quarter 2024 Versus Second Quarter 2023

• Revenue of $395.8 million compared to $409.8 million, a per-day decrease of 4.2 percent.
• Operating loss of $9.5 million compared to operating income of $13.2 million. On a non‑GAAP basis, operating loss of $2.5 million compared to operating income of $6.4 million.
• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of negative $0.6 million compared to $8.3 million, as detailed in the attached non-GAAP reconciliation tables.

"Shipments per day grew 12.6 percent, driven in part by customers turning to ArcBest’s managed solution to optimize their logistics spend. The decline in financial results on a year-over-year basis was primarily due to lower rates and margins for truckload solutions, reflecting the soft freight environment and excess full truckload capacity. The segment continues to benefit from productivity initiatives, as shipments per employee per day and SG&A cost per shipment both significantly improved on a year-over-year basis".

My quick analysis is that ArcBest is in relatively good shape and is growing daily shipment count. Like everyone else, they are seeing reduced revenues and margin compression.

The stock is currently down 13.3% today and down 11.83% YTD.