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    0.480
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  • OTRI.USA
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    0.480
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  • TSTOPVRPM.LAXSEA
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  • WAIT.USA
    126.000
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Company earningsLess than TruckloadNewsTop Stories

ArcBest posts record revenue, operating income in Q2

Operating ratio moves favorably by 550 basis points; net income triples year-over-year results

LTL and asset-light provider ArcBest Corp. reported on Monday record quarterly revenue and operating income with second-quarter revenue of $949 million, 50% higher than second-quarter 2020 results, and operating income of $74.3 million, more than tripling the results in the quarter.

Net income of $53.1 million more than tripled the year-earlier results. Earnings per share of $1.97 per diluted share nearly tripled the 67 cents per diluted share posted in the second quarter of 2020. The EPS numbers came in 37 cents above the median estimate of $1.60 from analysts polled on BarChart (NASDAQ: ARCB). 

All of the bottom-line results excluded various one-time items, and thus were presented in the non-GAAP accounting formula that factors out those events.

The 2021 results benefited from easy comparisons with the prior quarter when the COVID-19 pandemic severely curtailed industrial activity that is the heart of ArcBest’s business. The 2021 results also were aided by what continues to be a strong rebound in U.S. economic activity and a resurgence in industrial production, factors that are boosting results for LTL carriers as a whole.

Like its competitors, ArcBest ramped up its use of local and purchased transportation to augment its asset-based operations amid tight network capacity. The company spent roughly twice as much on purchased transportation in the 2021 quarter as it did during the year-earlier quarter, according to its financial statements. The comparison was skewed by relatively low purchased transportation expense in the 2020 quarter. Those costs fell 18% compared with the 2019 second quarter, according to the statements.

Judy R. McReynolds, the company’s chairman, president and CEO, said that demand remains strong for the LTL unit’s assets and that purchased transportation costs will stay elevated for some time.

Fort Smith, Arkansas-based ArcBest’s LTL business, which comprises roughly two-thirds of overall revenue, posted revenue of $652 million and non-GAAP operating income of $71.4 million, both company records. The company’s non-GAAP operating ratio, which calculates expenses as a percent of revenue, came in at 89%, a 550-basis-point improvement over the 94.4% ratio reported in the second quarter.

Daily shipments volumes rose 13.5% year, while daily tonnage increased 22.7%. Revenue per each 100 pounds carried rose 15.4%, due largely to increases in the company’s fuel surcharges. LTL pricing remains at near-historical highs, McReynolds said.

Revenue in ArcBest’s asset-light business, where it doesn’t own the assets but effectively controls their utilization, increased to $330.3 million, up nearly 67% on a daily basis. Non-GAAP operating income rose to $9.3 million, a figure that excluded a $6.9 million gain on the sale of the asset-light unit’s household goods moving business. The unit’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) jumped nearly four-fold to $19 million.

Near noon ET on Monday, ArcBest’s shares were up about 2.3% to $60.46 a share. Shares have risen more than 91% since the end of July 2020.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

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