ArcBest’s Q2 Financial Results: New Trends and Improvement

ArcBest recently shared its financial results for the second quarter of 2024. The results show mixed performance across its different business segments. Despite some challenges in its truckload brokerage operations, the company saw positive developments in its less-than-truckload (LTL) unit.

ArcBest’s Q2 Financial Results Overview

ArcBest reported adjusted earnings per share (EPS) of $1.98 for Q2. This was 8 cents lower than analysts expected but 44 cents higher than last year.

Less-Than-Truckload (LTL) Segment

The LTL segment, which includes ABF Freight, reported revenue of $713 million for the quarter. While daily tonnage dropped by 20%, the revenue per shipment increased by 23%. This was due to fewer but heavier shipments.

ArcBest stopped using a pricing model that lowered rates to fill its network. Instead, it now focuses on higher-margin shipments from core customers. This shift led to fewer shipments but higher revenue per shipment.

Tonnage and Revenue Trends

The decline in daily tonnage has slowed down, dropping from 22% in May to 13% in July. Shipments from core accounts rose by 14% in Q2. However, tonnage is expected to decline again in Q3 due to tough year-over-year comparisons.

Asset-Light Segment

ArcBest’s asset-light unit, which includes truck brokerage, reported a loss for the fourth consecutive quarter. The segment saw a $2.5 million adjusted operating loss, compared to a profit of $6.4 million last year. Revenue declined by 3% to $396 million. The company expects the asset-light segment to continue facing challenges in Q3 due to higher transportation costs.

Capital Expenditures and Future Plans

ArcBest plans to spend between $325 million and $375 million in 2024 on equipment, real estate projects, and technology upgrades.

Market Reaction

Following the release of its Q2 results, ArcBest’s shares fell by 11.1%, while the S&P 500 was down by 2.5%.

In summary, ArcBest’s Q2 2024 financial results show both challenges and opportunities. While the asset-light segment continues to struggle, the LTL segment shows promising signs of improvement. The company’s focus on strategic adjustments and investments should help position it well for future growth.