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ArcBest (ARCB) Stock Up on Q3 Earnings and Revenue Beat

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ArcBest Corporation (ARCB - Free Report)   performed impressively in the third quarter of 2018, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

The company’s earnings (excluding 8 cents from non-recurring items) of $1.44 per share surpassed the Zacks Consensus Estimate by 34 cents and increased significantly year over year. Effective tax rate (on an adjusted basis) declined to 26.6% in the reported quarter from 40% a year ago, thereby aiding the bottom line.

Total revenues came in at $826.2 million, which outpaced the Zacks Consensus Estimate of $818.7 million. Moreover, the top line increased 11% from the year-ago quarter number driven by improvement in tonnage per day and greater pricing yields.

Following the quarterly results, shares of this Zacks Rank #1 (Strong Buy) company increased more than 12%. Moreover, on the third quarter 2018 conference call, ArcBest stated that the National inventory to sales ratio is on a downward trend. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcBest Corporation Price, Consensus and EPS Surprise


ArcBest Corporation Price, Consensus and EPS Surprise | ArcBest Corporation Quote

Segmental Performance

Robust freight demand boosted the company’s asset-based business, which accounted for bulk of the top line (70.8%) in third-quarter 2018. At the segment, revenues came in at $585.3 million, reflecting an increase of 12.2% per day. Tonnage per day increased 1.6%, mitigating the 1% drop in shipments per day. Working days in the reported quarter were 63 compared with 62.5 a year ago.

Total billed revenue per hundredweight on asset-based shipments increased 10.1% driven by the company’s asset-based pricing initiatives and higher fuel surcharges. Billed revenue per shipment at the segment rose 13%, courtesy of an increase in average shipment size and average length of haul. Backed by greater efficiencies, the segment’s operating ratio (operating expenses as a percentage of revenues) improved 400 basis points to 91.4%. Notably, lower the value of the ratio the better.

The asset-light segment also performed well with total revenues improving 7.9% per day to $255.9 million. Segmental results were aided by increased revenue per shipment and higher market rates. Adjusted operating income rose 5.8% to $9.1 million in the reported quarter.

2018 CapEx Outlook Lowered

ArcBest now expects net capital expenditures for 2018 in the range of $145-$150 million (the earlier guidance had hinted the metric to be between $155 million and $165 million). The guidance was lowered due to the shift in the timing of some expenditures into 2019.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting quarterly results from key players like Expeditors International of Washington, Inc. (EXPD - Free Report) , Hertz Global Holdings, Inc (HTZ - Free Report) and Copa Holdings S.A. (CPA - Free Report) . While Expeditors will report third-quarter earnings on Nov 6, Hertz Global Holdings and Copa Holdings will release the same on Nov 8 and Nov 14, respectively.

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