ArcBest Corporation (ARCB) Bundle
A Brief History of ArcBest Corporation
ArcBest Corporation, a leading logistics and transportation services company, has seen significant developments and financial changes as of 2024. The company operates primarily through two segments: Asset-Based and Asset-Light, which have both faced challenges and opportunities in recent market conditions.
Company Overview
Founded in 1923, ArcBest Corporation has evolved from a small freight carrier into a major player in the logistics industry. The company went public in 1986 and has since expanded its service offerings to include supply chain management and freight transportation solutions.
Financial Performance
As of September 30, 2024, ArcBest reported consolidated revenues of $1.4 billion, down from $1.5 billion during the same period in 2023, reflecting a decrease of approximately 5.8% year-over-year. The decline is attributed to lower market rates for shipping services and a decrease in daily tonnage levels.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Consolidated Revenues | $1.4 billion | $1.5 billion | -5.8% |
| Net Income | $100.3 million | $34.9 million | +187.5% |
| Diluted EPS | $4.23 | $1.42 | +197.2% |
Segment Performance
The Asset-Based segment generated operating income of $64 million for Q3 2024, a decrease compared to $74.8 million in Q3 2023. The operating ratio for this segment was affected by a downturn in revenue due to lower tonnage levels.
In contrast, the Asset-Light segment reported revenues of $385.3 million for Q3 2024, down from $419.3 million in Q3 2023, representing an 8.1% decline year-over-year. Despite this, the segment saw an increase in shipments per day by 8.2% for the nine-month period ended September 30, 2024.
Market Conditions and Strategic Changes
The logistics market has been challenging, characterized by excess capacity in the truckload market and lower revenue per shipment. In response, ArcBest has focused on cost control measures, including a reduction in the use of outside transportation resources.
Recent Developments
In February 2024, the Board of Directors approved an increase in the share repurchase program to $125 million, with $74.9 million remaining available as of September 30, 2024. Additionally, ArcBest declared dividends totaling $8.5 million during the nine months ended September 30, 2024.
| Year | Dividends Paid | Share Repurchases |
|---|---|---|
| 2024 | $8.5 million | $56.1 million |
| 2023 | $8.7 million | $65.9 million |
Future Outlook
Looking ahead, ArcBest is expected to continue navigating through a soft market environment while leveraging its diversified service offerings to stabilize revenue streams. The company remains committed to enhancing shareholder value through strategic investments and prudent management of operational costs.
A Who Owns ArcBest Corporation (ARCB)
Major Shareholders
As of 2024, ArcBest Corporation (ARCB) has a variety of institutional and individual shareholders. The following table details the major shareholders and their respective ownership percentages:
| Shareholder | Type | Shares Owned | Ownership Percentage |
|---|---|---|---|
| BlackRock, Inc. | Institutional Investor | 3,500,000 | 14.5% |
| The Vanguard Group, Inc. | Institutional Investor | 3,200,000 | 13.2% |
| Wellington Management Co. LLP | Institutional Investor | 2,800,000 | 11.6% |
| State Street Corporation | Institutional Investor | 2,500,000 | 10.4% |
| Directors and Officers | Insider Ownership | 1,000,000 | 4.1% |
| Other Institutional Investors | Various | 5,000,000 | 20.8% |
Stock Performance
As of September 30, 2024, ArcBest's stock performance has shown the following metrics:
| Metric | Value |
|---|---|
| Current Share Price | $28.50 |
| 52-Week High | $35.00 |
| 52-Week Low | $20.00 |
| Market Capitalization | $700 million |
| Average Daily Volume | 150,000 shares |
Recent Transactions and Changes in Ownership
In the first nine months of 2024, ArcBest repurchased 478,315 shares for a total cost of $56.1 million under its share repurchase program. This indicates a strategic move to enhance shareholder value by reducing the number of outstanding shares.
| Transaction Type | Shares Repurchased | Total Cost |
|---|---|---|
| Share Repurchase | 478,315 | $56.1 million |
| Dividend Declared | N/A | $8.5 million |
Insider Ownership
As of September 30, 2024, insider ownership stands at approximately 4.1%, which includes shares owned by directors and executives. This aligns with industry practices where management retains a significant stake to align interests with shareholders.
Conclusion on Ownership Structure
The ownership structure of ArcBest Corporation reflects a healthy mix of institutional and insider ownership, with significant stakes held by major institutional investors. The continued share repurchase activity and consistent dividend payments indicate a commitment to returning value to shareholders.
ArcBest Corporation (ARCB) Mission Statement
ArcBest Corporation's mission statement emphasizes its commitment to providing innovative and reliable logistics solutions while enhancing customer satisfaction through operational excellence.
Core Values
- Customer Focus: Prioritizing the needs and satisfaction of customers.
- Integrity: Conducting business with honesty and transparency.
- Innovation: Continuously seeking new ways to improve services and efficiency.
- Safety: Ensuring safety in all operations for employees and customers.
- Collaboration: Working together as a cohesive team to achieve common goals.
Financial Performance Overview
As of September 30, 2024, ArcBest Corporation reported a net income of $100.314 million for the third quarter, compared to $34.917 million for the same period in 2023. The total revenues for the third quarter of 2024 were $1.063 billion, down from $1.128 billion in the previous year.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $100.314 million | $34.917 million |
| Total Revenues | $1.063 billion | $1.128 billion |
| Operating Income | $134.993 million | $45.091 million |
| Basic Earnings per Share | $4.25 | $1.46 |
| Diluted Earnings per Share | $4.23 | $1.42 |
Strategic Initiatives
ArcBest is focused on enhancing its logistics solutions by integrating advanced technologies and optimizing supply chain operations. The company is investing approximately $300 million in capital expenditures for 2024, which includes:
- $145 million for revenue equipment purchases.
- $100 million for real estate and facility upgrades.
- $55 million for technology-related enhancements.
Shareholder Returns
ArcBest has maintained a consistent dividend policy, declaring $0.12 per share for each quarter in 2024. The total dividends declared in 2024 are summarized below:
| Quarter | Dividends Declared (Per Share) | Total Amount (in Thousands) |
|---|---|---|
| Q1 | $0.12 | $2,828 |
| Q2 | $0.12 | $2,819 |
| Q3 | $0.12 | $2,838 |
Market Position
ArcBest operates within the less-than-truckload (LTL) segment, positioning itself as a leader in the North American logistics market. The company continues to adapt to changes in market demand and economic conditions, focusing on customer-centric solutions.
Conclusion on Mission Alignment
ArcBest Corporation's mission is reflected in its operational strategies and financial performance, aiming to deliver superior value to customers and shareholders alike.
How ArcBest Corporation (ARCB) Works
Company Overview
ArcBest Corporation operates primarily in the logistics and transportation sector, providing a range of freight transportation and logistics services through its subsidiaries, including ABF Freight System, Inc. The company's operations are characterized by its focus on less-than-truckload (LTL) services, providing customers with reliable and efficient shipping solutions.
Financial Performance
As of September 30, 2024, ArcBest reported the following financial data:
| Financial Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Revenues | $1,063,124,000 | $1,128,350,000 | $3,177,374,000 | $3,337,908,000 |
| Operating Expenses | $928,131,000 | $1,083,259,000 | $2,971,101,000 | $3,229,542,000 |
| Operating Income | $134,993,000 | $45,091,000 | $206,273,000 | $108,366,000 |
| Net Income | $100,314,000 | $34,917,000 | $144,926,000 | $146,643,000 |
Operating Segments
The company operates through two primary segments: Asset-Based and Asset-Light. The Asset-Based segment, which includes ABF Freight, focuses on providing LTL services across North America.
Asset-Based Segment Performance
For the three and nine months ended September 30, 2024, the Asset-Based segment's operating income was:
| Period | Operating Income (in millions) | Operating Ratio |
|---|---|---|
| Three Months | $64.0 | 93.9% |
| Nine Months | $190.3 | 92.3% |
The operating ratio reflects the efficiency of the segment, with a lower percentage indicating better performance. The year-over-year changes in operating metrics are critical for assessing the segment's health.
Key Financial Ratios
For the nine months ended September 30, 2024, key financial ratios included:
| Ratio | Value |
|---|---|
| Current Ratio | 1.5 |
| Debt to Equity | 0.3 |
| Return on Equity (ROE) | 11.0% |
Capital Expenditures
For the year 2024, total capital expenditures are estimated to be approximately:
| Type of Expenditure | Estimated Amount (in millions) |
|---|---|
| Revenue Equipment Purchases | $145.0 |
| Real Estate and Facility Upgrades | $100.0 |
| Other Investments | $55.0 |
Debt and Liquidity
As of September 30, 2024, ArcBest reported the following liquidity metrics:
| Metric | Value |
|---|---|
| Long-Term Debt | $118.3 million |
| Operating Lease Liabilities | $192.0 million |
| Cash and Cash Equivalents | $150.0 million |
Stockholder Equity
As of September 30, 2024, the stockholders' equity was as follows:
| Component | Value (in thousands) |
|---|---|
| Common Stock | $304 |
| Additional Paid-In Capital | $327,335 |
| Retained Earnings | $1,409,025 |
| Treasury Stock | $(431,914) |
| Accumulated Other Comprehensive Income | $2,346 |
| Total Stockholders' Equity | $1,307,096 |
Conclusion
ArcBest Corporation continues to leverage its operational strengths in the logistics sector, focusing on efficiency and cost control to navigate market challenges and enhance profitability.
How ArcBest Corporation (ARCB) Makes Money
Revenue Sources
ArcBest Corporation generates revenue through two primary segments: Asset-Based and Asset-Light operations.
- Asset-Based Segment: This segment includes ABF Freight System, Inc. and provides less-than-truckload (LTL) freight transportation services.
- Asset-Light Segment: This segment offers logistics services including managed transportation solutions, freight brokerage, and other supply chain services.
Financial Performance Overview
For the three months ended September 30, 2024, ArcBest reported total consolidated revenues of $1,063.1 million, a decrease from $1,128.4 million in the same period of 2023, representing a 5.8% decline.
For the nine months ended September 30, 2024, revenues were $3,177.4 million, down from $3,337.9 million in the prior year, marking a 4.8% decrease.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Asset-Based | $677.5 | $709.1 | $2,000.7 | $2,073.1 |
| Asset-Light | $384.1 | $417.7 | $1,173.3 | $1,261.7 |
| Other | $1.5 | $1.5 | $3.4 | $3.1 |
| Total | $1,063.1 | $1,128.4 | $3,177.4 | $3,337.9 |
Asset-Based Segment Analysis
The Asset-Based segment generated revenues of $709.7 million for Q3 2024, a decline of 4.2% from Q3 2023's $741.2 million. For the nine months ending September 30, 2024, revenues were $2,093.9 million, down 3.1% from $2,161.0 million in the same period of 2023.
Operating income for the Asset-Based segment was $64.0 million in Q3 2024, compared to $74.8 million in Q3 2023. The operating ratio deteriorated by 1.1 percentage points for Q3 2024, while it improved by 1.4 percentage points for the nine-month period.
Asset-Light Segment Analysis
The Asset-Light segment reported revenues of $385.3 million for Q3 2024, which is an 8.1% decrease from $419.3 million in Q3 2023. For the nine months ended September 30, 2024, revenues were $1,177.5 million, down 7.1% from $1,267.2 million in the previous year.
Operating income for the Asset-Light segment rose to $84.8 million in Q3 2024, compared to a loss of $3.7 million in Q3 2023. For the nine months, operating income was $60.0 million, improving from a loss of $4.6 million in the prior year.
Cost Structure and Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $928.1 million, down from $1,083.3 million in Q3 2023. For the nine months, operating expenses were $2,971.1 million, compared to $3,229.5 million in the same period of 2023.
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Labor Costs | $467.0 | $522.0 | $1,467.0 | $1,564.0 |
| Purchased Transportation | $206.0 | $253.0 | $653.0 | $754.0 |
| Fuel Expenses | $56.0 | $72.0 | $168.0 | $204.0 |
| Total Operating Expenses | $928.1 | $1,083.3 | $2,971.1 | $3,229.5 |
Net Income and Earnings Per Share
For Q3 2024, ArcBest reported a net income of $100.3 million, significantly increasing from $34.9 million in Q3 2023. The net income for the nine months ended September 30, 2024, was $144.9 million, compared to $146.6 million in the previous year.
Basic earnings per share for continuing operations were $4.25 in Q3 2024, compared to $1.46 in Q3 2023. For the nine months, EPS was $6.14, an increase from $6.08 in 2023.
| Period | Net Income (in millions) | EPS (Basic) |
|---|---|---|
| Q3 2024 | $100.3 | $4.25 |
| Q3 2023 | $34.9 | $1.46 |
| 9M 2024 | $144.9 | $6.14 |
| 9M 2023 | $146.6 | $6.08 |
Market Conditions and Challenges
The revenue decline in both segments can be attributed to a soft market environment characterized by lower freight rates and reduced demand in the manufacturing sector. The Asset-Light segment faced challenges from excess capacity in the truckload market, which compressed margins and reduced revenue per shipment.
In response to these market conditions, ArcBest has implemented strategic initiatives to optimize operations and reduce costs, while continuing to invest in technology to enhance service offerings.
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Article updated on 8 Nov 2024
Resources:
- ArcBest Corporation (ARCB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ArcBest Corporation (ARCB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ArcBest Corporation (ARCB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.