FORT SMITH, Ark. — ArcBest has announced an improved asset-based operating income despite higher labor contract costs and lower revenue in Q2.
According to a media release, ArcBest stated second quarter 2024 revenue from continuing operations of $1.08 billion, compared to $1.10 billion in the second quarter of 2023.
“I am incredibly proud of our employees’ commitment to utilizing our quality process in pursuit of excellence every day,” said Judy R. McReynolds, ArcBest Chairman and CEO. “This dedication has led to significant improvements in our operational execution, with ABF Freight achieving its best on-time service performance in recent years. Furthermore, our substantial year-over-year improvement in operating income is a solid performance, especially considering ongoing macroeconomic headwinds.”
Second quarter 2024 operating income from continuing operations was $48.8 million, compared to $42.1 million in the prior year period, and net income from continuing operations was $46.9 million, or $1.96 per diluted share, compared to $39.6 million, or $1.60 per diluted share, in 2023.
Excluding certain items in both periods as identified in the attached reconciliation tables, second quarter 2024 non-GAAP operating income from continuing operations was $64.2 million, compared to $50.1 million in the prior year period, an improvement of $14.1 million. On a non-GAAP basis, net income from continuing operations was $47.4 million, or $1.98 per diluted share, compared to $38.0 million, or $1.54 per diluted share, in the second quarter of 2023.
Results of operations comparisons
Asset-based Q2 2024 vs. Q2 2023
- Revenue of $712.7 million compared to $722.0 million, a per-day decrease of 2.1 percent.
- Total tonnage per day decrease of 20.3 percent.
- Total shipments per day decrease of 4.8 percent.
- Total billed revenue per hundredweight increase of 23.0 percent.
- Core daily shipments increase of 14 percent and tonnage increase of 11 percent.
- Operating income of $72.8 million and an operating ratio of 89.8 percent, on both a GAAP and non-GAAP basis, compared to prior-year GAAP operating income of $43.3 million and an operating ratio of 94.0 percent and prior-year non-GAAP operating income of $51.7 million and an operating ratio of 92.8 percent.
According to the release, on a non-GAAP basis, the Asset-Based segment generated $21.1 million more operating income than second quarter 2023 despite lower revenue levels and higher labor costs, which highlights the continued focus on serving core customers well and improving operational efficiencies. Total second quarter daily shipment and tonnage levels were below the prior year, due primarily to fewer transactional shipments offset by increased core shipments, which positively impacted productivity and contributed to an improved operating ratio.
On a non-GAAP basis, the Asset-Based segment delivered its second-best operating income result for a second quarter in company history. Pricing momentum continued in the quarter, driven by improved freight mix, higher pricing on transactional shipments and contract renewal increases of 5.1 percent. Overall, LTL industry pricing remains rational. Compared sequentially to the first quarter of 2024, second quarter 2024 revenue per day was up 5.3 percent, tons per day improved 2.3 percent and shipments per day were better by 1.9 percent. Second quarter billed revenue per hundredweight increased 3.2 percent from first quarter 2024. The operating ratio improved 220 basis points sequentially, which was within the range of sequential quarterly changes seen in recent years.
Asset-Light Q2 2024 vs. Q3 2023
- Revenue of $395.8 million compared to $409.8 million, a per-day decrease of 4.2 percent.
- Operating loss of $9.5 million compared to operating income of $13.2 million. On a non-GAAP basis, operating loss of $2.5 million compared to operating income of $6.4 million.
- Adjusted earnings before interest, taxes, depreciation and amortization of negative $0.6 million compared to $8.3 million.
Compared to the second quarter of 2023, Asset-Light revenues were impacted by lower revenue per shipment and reduced margins associated with the soft rate environment and a higher mix of managed transportation business, which has lower revenue per shipment and margins. Shipments per day grew 12.6 percent, driven in part by customers turning to ArcBest’s managed solution to optimize their logistics spend. The decline in financial results on a year-over-year basis was primarily due to lower rates and margins for truckload solutions, reflecting the soft freight environment and excess full truckload capacity. The segment continues to benefit from productivity initiatives, as shipments per employee per day and SG&A cost per shipment both significantly improved on a year-over-year basis. Compared sequentially to first quarter 2024, second quarter 2024 revenue per day was down one percent. Purchased transportation costs decreased sequentially as carrier rates dipped following the first quarter spike related to winter weather. The reduced purchased transportation costs were the biggest contributor to the lower non-GAAP operating loss in second quarter 2024, versus first quarter. Total shipments per day decreased 1.4 percent compared to first quarter 2024 and revenue per shipment was flat.
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
