Transportation and logistics provider ArcBest beat fourth-quarter expectations on Tuesday.
ArcBest (NASDAQ: ARCB) reported adjusted earnings per share of $2.47, 26 cents ahead of the consensus estimate and 5 cents higher year over year (y/y). The number excluded a few one-offs like costs from a freight handling pilot, acquisition-related items and settlement expenses from a worker classification lawsuit.
The asset-based segment, which includes less-than-truckload operations, reported $710 million in revenue, which was down 0.2% y/y. Tonnage per day was down 7.2% as shipments were off 0.8% and weight per shipment fell 6.5%.
Revenue per hundredweight, or yield, increased 6.8% including fuel surcharges. The metric was nearly 4% higher than the third quarter. Yields on LTL shipments were up by double-digit percentages excluding fuel. The company credited a revenue mix favoring core customers as the reason for the improvement.
Pricing on contract renewals and deferred agreements increased 5.6% y/y on average in the quarter.
The unit recorded an 87.7% adjusted operating ratio, which was 90 basis points better y/y and 110 bps better than in the third quarter. The sequential improvement was driven by a variety of cost initiatives and in line with management’s expectations (100 bps to 200 bps of improvement) compared to normal sequential deterioration of 100 to 300 bps.
Asset-based revenue per day was 7% lower y/y in January as tonnage fell 18%, which was partially offset by a 13% increase in yield. Both daily shipments and weight per shipment were off by 9% in the month. The company said a price increase on transactional shipments led to lower volumes. However, shipments and tonnage at core accounts were up 8% and 6% y/y, respectively, during the month.
The asset-light unit, which includes truck brokerage, saw revenue decline 13.7% y/y to $414 million. Total daily shipments increased 12.4% y/y, but a mid-20% decline in revenue per load pulled the top line lower. The unit reported an adjusted operating loss of $1.3 million in the quarter.
In January, revenue in the segment was down 15% y/y as an 11% increase in shipments was offset by a 23% decline in revenue per load.
The company expects net capital expenditures of $325 million to $375 million in 2024 compared to $245 million last year. The new capex budget includes $155 million in rolling stock and $130 million in real estate projects. The company will also invest in technology and upgrade dock equipment.
ArcBest will host a call on Tuesday at 9:30 a.m. EST to discuss fourth-quarter results.
Table: ArcBest’s key performance indicators
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