Fort Smith-based ArcBest[1] points to continued weakness in the U.S. manufacturing and housing sectors as reasons the shipping and logistics company may post lower-than-expected financial metrics in the third quarter.
The company provided key operating data during July and August in a filing posted Monday (Sept. 8) with the U.S. Securities and Exchange Commission. The report was filed after the markets closed.
In July and August, the first two months of the third quarter, ArcBest reported a 1% gain in revenue per day, a 3% gain in tonnage shipped, but a 1% decline in billed revenue per hundredweight – a key measure in the less-than-truckload (LTL) sector – compared with the same period in 2024. ABF Freight, an LTL carrier, is the largest ArcBest subsidiary. Also, total billed revenue per shipment was down 3%.
The company said it expects an operating ratio decline in the quarter based on the July and August results.
“The variance from prior expectations for the third quarter is attributable to lower-than-anticipated weight per shipment, reflecting ongoing macroeconomic pressures, including continued softness in manufacturing and housing activity,” the company noted in the filing.
The company expects a $16 million one-time gain in the ABF segment resulting from proceeds from a real estate deal. Also, the company
“Despite these challenges, ArcBest has achieved meaningful success in adding new core LTL business, as evidenced by year-over-year increases in shipments and tonnage,” the company noted. “Service levels, which were temporarily impacted by volume growth, have normalized. The company remains focused on onboarding new business while maintaining consistent reliability.”
In the smaller asset-light – logistics – segment, ArcBest reports that revenue per day is down 8% and revenue per shipment is down 10% in July and August compared with the same period in 2024. The company said the operating income for the segment will be between breakeven and $1 million.
“Since March, truck tonnage has been in a tight range,” American Trucking Associations Chief Economist Bob Costello said in his July tonnage index report[2]. “The good news is truck freight volumes haven’t fallen much over that period, but we are not seeing many increases either. In July, there were mixed drivers of truck tonnage with housing starts and retail sales up, while manufacturing output was flat to down depending on the metric.”
The consensus estimate among analysts who follow the company is earnings per share of $1.56 in the third quarter, which would be below the $1.63 in the same quarter of 2024. The revenue estimate is $1.04 billion, which would be below the $1.063 billion in the same quarter of 2024.
ArcBest on July 30[3] posted second quarter net income of $25.809 million, down 45% compared with the same period in 2024. Per share earnings of $1.12 was well below the consensus estimate of $1.46. The company also reported adjusted per share earnings of $1.36. Revenue in the quarter was $1.022 billion, down 5.1% compared with $1.077 billion in the same period of 2024.
ArcBest shares (NASDAQ: ARCB) closed Monday at $75.34, down 36 cents. In the past 52 weeks the share price has ranged between $123.26 and $55.19.
Related
References
- ^ ArcBest (arcb.com)
- ^ July tonnage index report (www.trucking.org)
- ^ on July 30 (talkbusiness.net)