Logistics provider ArcBest Corp. (NASDAQ: ARCB) reported record first-quarter results Tuesday. Adjusted earnings per share were $1.01 compared to the consensus estimate of 58 cents per share and the year-ago result of 36 cents per share.
Total revenue increased 18.2% year-over-year to $829 million and the company recorded a 95.3% consolidated operating ratio, a 290-basis point improvement.
Click here for full article – ArcBest’s capital spending plan signals confidence in prolonged freight cycle
“We’re pleased to report our best-ever operating income for the first quarter as well as increased revenue and profitability in what is historically the most challenging quarter of the year,” stated Judy McReynolds, chairman, president and CEO. “These strong results reflect our ability to create solutions to support our customers as they continue to face supply chain challenges associated with their rebound from the COVID-19 pandemic.”
Compared to the fourth quarter of 2020, the OR improved 10 bps. Typically, ArcBest’s margins decline between 350 bps and 450 bps from the fourth to first quarters.
Asset-based revenue, which includes the less-than-truckload segment, increased 7.9% year-over-year to $556 million. Tonnage increased 1.8% year-over-year. A mid-single-digit percentage increase in LTL tonnage was partially offset by a double-digit percentage decline in spot truckload tonnage.
LTL shipments increased 3% with weight per shipment up 2.6%. LTL revenue per hundredweight, excluding fuel surcharges, was up by a mid-single-digit percentage. Rates on contract renewals and deferred pricing agreements were up 5.6% year-over-year, the best first-quarter increase in 20 years.
“As shippers are experiencing improving trends in their businesses, greater demand for ArcBest’s asset-based services resulted in increased first-quarter revenue and higher profitability,” the press release stated. “Shipment and tonnage growth during the quarter was also positively impacted by unseasonal strength in the housing market associated with a shift in buyer demand due to the pandemic.”
April revenue in the asset-based segment was up 47% year-over-year as tonnage increased 29% and shipments climbed 19%. The year-over-year comparison was greatly impacted by severe declines in volumes during April 2020 as COVID-related lockdowns spread. Revenue per hundredweight, inclusive of fuel, was up 15% during the month.
The asset-based segment posted a 93.4% adjusted OR, 310 bps better year-over-year.
Higher volumes led to increased usage of purchased transportation, notably in local and linehaul moves. The expense line was 280 bps higher year-over-year as a percentage of revenue.
However, higher yields, a 370-bp decline on the wages and benefits line and nearly four times the gains on sale, drove the margin improvement in the quarter. Higher gains on sale accounted for 120 bps of margin improvement compared to first-quarter 2020.
Asset-light revenue was 43.4% higher year-over-year at $312 million. Strong demand and higher rates drove the increase. The division recorded $9.3 million in operating income compared to a slight loss in the prior-year quarter.
Asset-light revenue per day was up 89% year-over-year in April.
The company will host a call at 9:30 a.m EDT Tuesday with analysts to discuss results. Stayed tuned to FreightWaves for more earnings coverage of ArcBest.