ArcBest Reports Q4 and Full-Year 2024 Financial Results

ArcBest, a leading provider of supply chain logistics solutions, has released its financial results for the fourth quarter and full year of 2024. The company reported fourth-quarter revenue of $1.0 billion, reflecting a slight decline compared to $1.1 billion in the same quarter of the previous year. Net income for the quarter stood at $29.0 million, or $1.24 per diluted share, down from $48.8 million, or $2.01 per diluted share, in Q4 2023. On a non-GAAP basis, net income was $31.2 million, or $1.33 per diluted share, compared to $60.0 million, or $2.47 per diluted share, in the prior year.

For the full year 2024, ArcBest generated revenue of $4.2 billion, slightly below the $4.4 billion recorded in 2023. Net income from continuing operations reached $173.4 million, or $7.28 per diluted share, which included a $67.9 million after-tax benefit stemming from the reduction in the fair value of contingent consideration related to a 2021 acquisition. Reports This represents an increase from 2023, when net income totaled $142.2 million, or $5.77 per diluted share. On a non-GAAP basis, full-year net income was $149.7 million, or $6.28 per diluted share, compared to $194.1 million, or $7.88 per diluted share, in the prior year.

CEO’s Statement on Performance and Strategic Direction

Judy R. McReynolds, ArcBest Chairman and CEO, emphasized the company’s continued focus on operational efficiency and service excellence. “Throughout 2024, we made significant progress in controlling costs, improving productivity, and enhancing our service quality,” said McReynolds. “These achievements underscore our commitment to excellent execution and are yielding tangible results. Reports I want to extend a heartfelt thank you to our dedicated employees, whose hard work and innovation have been pivotal in reaching these milestones. Reports Together, we are well-positioned for continued growth and success.”

Operational Performance Overview

Asset-Based Segment Performance

Fourth Quarter 2024 vs. Fourth Quarter 2023:

Revenue for the segment totaled $656.2 million, down from $710.0 million in the prior year’s quarter, reflecting a per-day decrease of 7.6%.
Tonnage per day declined by 7.3%.
Shipments per day fell by 1.1%.
Billed revenue per hundredweight increased slightly by 0.6%.
Operating income stood at $52.3 million, with an operating ratio of 92.0%, compared to $87.5 million and an operating ratio of 87.7% in Q4 2023.

The decrease in tonnage was driven primarily by a 6.3% reduction in weight per shipment, coupled with a 1.1% drop in daily shipments. Persistent weakness in the manufacturing sector negatively impacted weight per shipment metrics. Reports However, productivity improvements of 2.3% and various cost-reduction initiatives helped offset the effects of a soft market environment, rising insurance costs, and increased labor costs associated with the annual union contract rate hike that took effect in Q3 2024.

Pricing remained steady, with contract renewals and deferred pricing agreements seeing an average increase of 4.5% during the quarter. However, lower fuel costs partially offset these pricing gains. Reports Excluding fuel surcharges, revenue per hundredweight increased at a mid-single-digit rate year-over-year, and overall, pricing within the less-than-truckload (LTL) sector remained stable.

On a sequential basis compared to Q3 2024, revenue per day declined by 4.5%. Weight per shipment saw a modest improvement of 0.6%, while daily shipments dropped by 2.6%, resulting in a 2.1% reduction in daily tonnage. The operating ratio increased by 100 basis points sequentially, aligning with historical seasonal trends that typically range from 100 to 200 basis points.

Asset-Light Segment Performance

Fourth Quarter 2024 vs. Fourth Quarter 2023:

Revenue decreased to $375.4 million, down from $413.4 million, reflecting a per-day decline of 9.2%.
The segment reported an operating loss of $1.6 million, an improvement compared to the $7.7 million operating loss in Q4 2023.
On a non-GAAP basis, the operating loss was $5.9 million, compared to $1.3 million in the prior year’s quarter.
Adjusted EBITDA was negative $4.2 million, compared to positive $0.7 million in Q4 2023.

Lower revenue per shipment, influenced by a soft rate environment and a higher mix of managed transportation business (which typically has smaller shipment sizes and lower revenue per shipment), contributed to the decline in segment revenues. Reports However, operational efficiencies have continued to improve, with shipments per employee per day increasing by 20.8% year-over-year. Despite these productivity gains, excess truckload capacity and a generally weak freight market remain challenges for the segment.

Sequentially compared to Q3 2024, daily shipments declined by 1.4%, but revenue per shipment rose by 2.0%, leading to a 0.6% increase in daily revenue. Reports While shipments per employee per day improved by 5.8%, rising purchased transportation costs as a percentage of revenue compressed margins. The non-GAAP operating loss increased by $2.0 million quarter-over-quarter, primarily due to ongoing pressures in the truckload brokerage pricing environment.

Full-Year 2024 Performance

Asset-Based Segment

Revenue for the full year stood at $2.8 billion, down slightly from $2.9 billion in 2023, reflecting a per-day decrease of 4.6%.
Tonnage per day declined by 14.3%.
Shipments per day fell by 3.3%.
Billed revenue per hundredweight increased by 11.7%.
Operating income totaled $242.6 million, with an operating ratio of 91.2%.
On a non-GAAP basis, operating income was also $242.6 million, with an operating ratio of 91.2%, compared to $275.5 million and 90.4% in 2023.

Asset-Light Segment

Full-year revenue was $1.6 billion, compared to $1.7 billion in 2023, an 8.0% per-day decrease.
Operating income was $58.4 million, including a $90.3 million pre-tax gain from a fair value adjustment related to contingent earnout consideration. This compares to an operating loss of $12.3 million in 2023.
On a non-GAAP basis, the segment reported an operating loss of $17.1 million, compared to operating income of $5.3 million in the prior year.
Adjusted EBITDA was negative $9.8 million, compared to $12.9 million in 2023.

Capital Expenditures and Shareholder Returns

In 2024, ArcBest made net capital expenditures of $288 million, including $160 million for revenue equipment and $85 million in real estate investments, primarily for its Asset-Based operations. Depreciation and amortization costs for property, plant, and equipment were recorded at $136 million.

The company also returned over $85 million to shareholders through a combination of share repurchases and dividend payments while continuing to invest in strategic growth initiatives. As of January 29, 2025, ArcBest had $48.7 million remaining under its current stock repurchase program and intends to continue opportunistic buybacks based on market conditions, while maintaining a balanced approach to capital investment and financial leverage.

Source Link