ArcBest, a leader in supply chain logistics, reported its Q3 2024 financial results, reflecting its efforts to navigate a challenging freight environment through cost control and productivity gains. The company reported revenue of $1.06 billion, down from $1.13 billion in Q3 2023, and net income of $100.3 million, or $4.23 per diluted share. This includes a $69.1 million after-tax gain from a reduced fair value estimate for contingent consideration related to a 2021 acquisition. Excluding this benefit, non-GAAP net income was $38.8 million, or $1.64 per diluted share, compared to $56.7 million in the prior year.
CEO Judy R. McReynolds highlighted the impact of ArcBest’s cost management, technology investments, and improved service quality, noting that these efforts helped ABF exceed industry benchmarks in service performance, as recognized by Mastio.
The reduction in contingent consideration liability stems from a lower likelihood of additional payments for ArcBest’s 2021 acquisition, given ongoing softness in the truckload market. This adjustment, reflected in GAAP results, was excluded from non-GAAP results to provide a clearer view of ongoing operations.
Segment Performance
Asset-Based Segment:
- Revenue was $709.7 million, a 5.8% per-day decrease from Q3 2023, with total tonnage down 11.3%.
- Shipments per day dipped slightly, while billed revenue per hundredweight rose 7.4%.
- Operating income was $64.0 million, with a 91.0% operating ratio. Excluding one-time items, operating income declined by $18.8 million year-over-year, mainly due to reduced weight per shipment driven by continued weakness in manufacturing.
- Productivity improved 5.7%, helping to offset higher insurance and labor costs following a union contract rate increase effective in Q3 2024.
Asset-Light Segment:
- Revenue was $385.3 million, down 9.6% from Q3 2023, impacted by softer rates and a higher proportion of managed transportation services.
- Including a $91.9 million gain from reduced contingent consideration, operating income was $84.8 million, compared to an operating loss of $3.7 million in the prior year.
- On a non-GAAP basis, the segment reported a comparable operating loss to Q3 2023.
- Productivity improvements were notable, with shipments per employee up 19.5% year-over-year, though excess truckload capacity continued to pressure results.
Looking forward, ArcBest’s strategic focus on cost management, service quality, and technological innovation positions it to navigate ongoing market challenges while delivering reliable performance for its customers.
Conference Call
ArcBest will host a conference call with company executives to discuss the quarterly results. The call will be today, Friday, November 1, 2024 at 9:30 a.m. EDT (8:30 a.m. CDT). Interested parties are invited to listen by calling (800) 715‑9871 or by joining the webcast which can be found on ArcBest’s website at arcb.com. Slides to accompany this call are included in Exhibit 99.3 of the Form 8-K filed on November 1, 2024, will be posted and available to download on the company’s website prior to the scheduled conference time, and will be included in the webcast. Following the call, a recorded playback will be available through the end of the day on November 15, 2024. To listen to the playback, dial (800) 770-2030. The conference call ID for the live conference call and the playback is 2815802. The conference call and playback can also be accessed through November 15, 2024 on ArcBest’s website at arcb.com.
About ArcBest
ArcBest® (Nasdaq: ARCB) is a multibillion-dollar integrated logistics company that helps keep the global supply chain moving. Founded in 1923 and now with 15,000 employees across 250 campuses and service centers, the company is a logistics powerhouse, using its technology, expertise and scale to connect shippers with the solutions they need — from ground, air and ocean transportation to fully managed supply chains. ArcBest has a long history of innovation that is enriched by deep customer relationships. With a commitment to helping customers navigate supply chain challenges now and in the future, the company is developing ground-breaking technology like Vaux™, one of the TIME Best Inventions of 2023.
