William B. Cassidy, Senior Editor | Jul 31, 2012 1:13PM EDT
Transport operator Arkansas Best delivered an $11.8 million net profit in the second quarter, recovering from an $18.2 million first quarter loss.
The company’s largest subsidiary, ABF Freight System, reported a $7.7 million operating profit, compared with a $22 million loss the previous quarter.
ABF’s operating revenue dropped 1.4 percent to $445.7 million, as the company’s freight volume slipped for the fourth straight quarter.
Shipments and tonnage dropped from a year ago, falling 5.9 percent and 6.3 percent respectively. In the first quarter, they dropped 8.4 percent and 9.9 percent.
The sixth-largest U.S. LTL operator looks to higher pricing, cost-cutting and negotiations for a new Teamster contract in 2013 to help secure more sustainable profit.
Arkansas Best lost $127.9 million in 2009 and $32.7 million in 2010 before posting a $6.8 million profit for 2011.
The $180 million purchase of Panther Expedited Services in June added $10.8 million to Arkansas Best’s top line, the company said Tuesday.
Arkansas Best’s total revenue rose 2.4 percent from a year ago to $511 million, boosted by about $60 million in revenue from truckload brokerage, preventive maintenance and household goods moving.
Excluding an $8 million tax benefit and Panther transaction costs, Arkansas Best had a net profit of $5.2 million in the quarter, compared with $5.3 million a year ago.
ABF Freight’s operating profit was up 1 percent from a year ago. The LTL carrier’s revenue per hundredweight rose 4.7 percent year-over-year to $27.88.
Second-quarter contract rates were at “favorable levels” for the carrier, Arkansas Best said. ABF implemented a 6.9 percent general rate increase at the end of June.
Over the past year, ABF has taken aim at what it calls “inadequate pricing” to improve profitability, as reflected in its rising revenue per hundredweight.
Revenue per hundredweight, or yield, rose 11.5 percent year-over-year in the first quarter, 12.8 percent in the fourth quarter and 15.9 percent in the third quarter.
“While we are encouraged by ABF’s yield initiatives, we continue to focus on various paths to reduce ABF’s overall cost structure,” Arkansas Best President and CEO Judy R. McReynolds said in a statement.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
