ArcBest Corporation ARCB performed impressively in the fourth quarter of 2018, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
The company’s earnings (excluding 43 cents from non-recurring items) of $1.01 per share surpassed the Zacks Consensus Estimate by 9 cents and increased significantly year over year. Effective tax rate (on an adjusted basis) declined to 26.2% in the reported quarter from 34.9% a year ago, thereby aiding the bottom line.
Total revenues came in at $774.3 million, which outpaced the Zacks Consensus Estimate of $769 million. Moreover, the top line increased 8.9 % from the year-ago quarter number on the back of higher revenues at the asset-based and asset-light segments.
Segmental Performance
Robust freight demand boosted the company’s asset-based business, which accounted for bulk of the top line (70.9%) in fourth-quarter 2018. At the segment, revenues came in at $548.9 million, reflecting an increase of 10.4% per day. Tonnage per day increased 2.8%, while shipments per day climbed 4.2%.
Total billed revenue per hundredweight on asset-based shipments increased 7.9% driven by higher fuel surcharges. LTL (Less than truckload)-rated freight increased in mid-single digits, percentagewise, on excluding fuel surcharge. Backed by greater efficiencies, the segment’s operating ratio (operating expenses as a percentage of revenues) improved 280 basis points to 93.3%. Notably, lower the value of the ratio the better.
The asset-light segment also performed well, with total revenues improving 9.7% per day to $243.8 million. Segmental results were aided by increased revenue per shipment among other factors. Adjusted operating income rose 41.8% to $7.8 million in the reported quarter.
ArcBest Corporation Price, Consensus and EPS Surprise
ArcBest Corporation Price, Consensus and EPS Surprise | ArcBest Corporation Quote
2019 CapEx Outlook
For 2019, ArcBest expects net capital expenditures in the range of $170-$180 million, higher than the 2018 figure of $134 million. The upside can be attributed to expenses pertaining to real estate projects, dock equipment and technology-related investments.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting quarterly results from key players like Copa Holdings CPA, Expeditors International of Washington EXPD and Hertz Global Holdings HTZ. While Copa Holdings will report fourth-quarter earnings on Feb 13, Expeditors and Hertz Global Holdings will release the same on Feb 19 and Feb 25, respectively.
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