Manufacturing sector weakness and a persistent nationwide freight recession pushed second quarter net income and revenue lower at Fort Smith-based ArcBest. However, revenue was up in the company’s less-than-truckload segment.
The shipping and logistics company on Wednesday (July 30) 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.
“Despite ongoing macroeconomic challenges, I commend our team for their continued commitment to meeting customer needs and achieving solid results,” Judy McReynolds, ArcBest chairman and CEO, said in the report. “In today’s rapidly evolving environment, our customers are seeking flexible, forward-thinking solutions. Thanks to the deep expertise across our organization and our integrated offerings, we’re well-positioned to meet those needs with a high level of service.”
Net income in the first half of the year totaled $28.94 million, below the $44.612 million in the same period of 2022. Revenue in the first half of the year was $1.989 billion, also below the $2.114 billion in the same period of 2024.
The soft freight economy is reflected in a recent report from the American Trucking Associations. The trade group’s truck tonnage index for June was down 0.4%, and was down 0.1% in May.
“In the second quarter, truck tonnage was essentially flat, increasing 0.2% from the first quarter, but falling 0.2% from a year earlier,” noted ATA Chief Economist Bob Costello. “Freight levels have been helped recently by small gains in factory output and retail sales, but weaker construction activity, especially for single-family homes, has been a drag on volumes.”
SEGMENT NUMBERS
Second quarter operating income with ABF Freight, the company’s largest subsidiary and a less-than-truckload carrier, was $51.029 million, down 30% compared with the same period in 2024. Revenue in the quarter was $713.312 million, slightly better than the $712.725 million in the same period of 2024.
“Tonnage growth was driven by a 5.6 percent increase in daily shipments, primarily from newly onboarded core LTL customers,” the company noted in the report. “This was partially offset by a 1.2 percent decline in total weight per shipment. While new shipments were generally heavier, ongoing weakness in the manufacturing sector continues to pressure weight per shipment metrics and profitability.”
Second quarter operating income in the company’s logistics segment was $591,000, a big improvement over the $9.498 million loss in the same period of 2024. Revenue for the segment was $341.922 million, below the $395.817 million in the same quarter of 2024.
“Revenue declines were primarily due to lower revenue per shipment in a soft rate environment and a higher mix of managed transportation business, which typically involves smaller, lower-revenue shipments,” according to the earnings report. “A 6.5 percent decline in shipments per day reflected a strategic reduction in less profitable truckload volumes, partially offset by continued growth in managed solutions.”
ArcBest also reported that revenue billed per hundredweight in the second quarter was $48.54, down 3.1% compared with the 2024 quarter. Billed revenue per shipment averaged $537.94 in the quarter, down 4.3% compared with the 2024 quarter. Daily tonnage shipped was up 4.3%, and shipments per day rose 5.6% in the second quarter.
ArcBest shares (NASDAQ: ARCB) closed Tuesday (July 29) at $85.46. In the past 52 weeks the share price has ranged between $129.83 and $55.19.