ArcBest Corp. on Friday reported a quarterly profit of $14.7 million for its third quarter, about a 14 percent increase compared with the third quarter of last year.
Overall revenue for the quarter was $744.2 million, compared with $713.9 million last year. Earnings per share were 56 cents, up from 49 cents a year ago. A consensus of 11 analysts forecast earnings per share of 58 cents.
In their third-quarter earnings conference call Friday morning, ArcBest Corp. senior leaders told investors the company's efforts this year to charge for freight shipments based more precisely on the dimensions of packages are starting to pay off.
Throughout 2017, Fort Smith-based ArcBest has tried to become more sophisticated in how it hauls its customers' freight in an increasingly improving freight environment. Chief executive Judy McReynolds applauded her company's efforts in this area of the business.
Beginning Aug. 1, the company implemented a minimum package size plan that factors the length, width and height of each package, because e-commerce orders increasingly take up more space in trailers but weigh less than regular freight.
"They introduced a new cubic minimum charge in place, and this has helped them capture better pricing, or said more appropriately, capture more yield," Stephens Inc. analyst Brad Delco said.
McReynolds spoke a lot about "yield" improvements as well. As Delco explained, "yield is a function of price and mix." That means as demand for freight tightens, companies such as ArcBest have more leverage to charge more for services. The "mix," Delco said, consists of the length of each haul, the weight of the shipments, and the density of each shipment.
"Clearly pricing is getting a lot better for the [less-than-truckload] industry," Delco said. "And I think we see evidence of that in these results."
Though its asset-based operations saw shipments handle about 43,587 fewer tons this past quarter, revenue per shipment in the segment continued to grow by about 4.9 percent year-over-year.
Revenue from the asset-light division rose to $235.3 million from $210 million in third-quarter 2016. The company attributes the increase to the business it gained from a Sept. 2016 acquisition of a dedicated truckload company and "growth in expedite services."
"The initiatives we have embarked on this year to optimize our structure and offer most services under the ArcBest brand have positioned us well as we are winning more business from existing customers and creating new relationships that were previously outside our reach," McReynolds said.
Business on 11/04/2017
Print Headline: ArcBest posts $14.7 million profit