Earnings Watch: ArcBest Loss Grows, P.A.M. Transportation Profit Slips

The parent company to less-than-truckload carrier ABF Freight and others saw its first quarter losses grow despite healthy shipment growth and improved pricing, while a truckload carrier saw lower profits but beat expectations.

ArcBest Corp. recorded a net loss $7.4 million, or 29 cent per share, compared to a first quarter 2016 net loss of $6.1 million, or 24 cent per share. Revenue in the most recent quarter was $651.1 million compared $621.5 million a year earlier. Both revenue and the per share performance fell short of a consensus estimate from analysts.

“The first quarter, typically the most challenging of the year, saw revenue growth in both our asset-based and asset-light businesses, but also experienced some changing freight characteristics on the less-than-truckload side and a degree of weaker demand, particularly in the truckload sector,” said president and CEO Judy R. McReynolds.

The company's asset-based segment, which includes ABF, had revenue of $464.4 million compared to $439.1 million, a per-day increase of 4.9%. Tonnage per day decreased 0.7% but shipments per day increased 5.7%. All this led to an operating loss of $10 million, up from an operating loss of $9 million in the first quarter of 2016.

“Asset-based services maintained pricing discipline, and average shipment rates were positively impacted by changes in freight profile and increases in fuel surcharge,” the company said in a statement. “Recent trends of asset-based shipment growth continued, resulting in the need for increased amounts of freight handling labor and purchased transportation resources.”

ArcBest's asset-light operation had revenue of $193.1 million compared to $186 million a year earlier with operating income of $1.9 million compared to operating income of $1 million during the first quarter of last year.

The increase in revenue was the result of growth in expedited services and the impact of additional dedicated truckload business related to a second ...Read the rest of this story

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Economic Watch: Unemployment Lowest in a Decade, Factory Orders Move Higher

Unemployment in the U.S. has fallen again, hitting its lowest level in a decade but minus any contribution from trucking in April, according to a new report released Friday. Meanwhile, a separate report shows some improvements in the nation's struggling manufacturing sector.

Employers added 211,000 non-farm jobs last month, better than expectations of 190,000 job additions and well above the downwardly revised 79,000 jobs added last month while the February jobs gain was increased to 232,000 from 219,000.

This pushed the nation's unemployment rate down 0.1 of a percentage point to 4.4%, its lowest reading since May 2007.

Despite the overall performance, for-hire trucking employment was nearly unchanged, shedding just 100 jobs during April while the wider transportation and warehousing sector added 3,500 jobs. This was mainly due to increased manpower for support activities related to transportation as well as gains in the couriers and messengers as well as the warehousing and storage categories.

The report also showed average wages in April climbed 0.3% from the month before to $26.19 per hour while hourly pay increased 2.5% from the same time a year ago. But that was hardly better than the 12-month increase of 2.4% in the consumer price index, the nation's widest measure of inflation.

The rise in April payroll employment provides some evidence that the weakness in March was an anomaly and that business confidence remains robust to take on more workers, according to Paul Ferley, assistant chief economist at RBC Economics Research.

“The wage increase did moderate slightly in April but is still indicative of real wage gains,” he said. “This continued support to household incomes should contribute to second quarter consumer spending growth, and overall second quarter gross domestic product growth, rebounding to an above-average rate after a disappointing first quarter increase.”

Also, the report is quite likely to push the Federal Reserve ...Read the rest of this story

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