ArcBest Corporation has announced its financial results for the third quarter of 2014. It reported revenue of $711.3m an increase of 14% compared to Q3 2013. The company also recorded a year-on-year increase of 60.67% in operating income, to $32.94m. Accordingly ArcBest’s Q3 operating margin stood at 4.63%.
At ABF Freight, ArcBest’s road freight division, third quarter revenue was $523.4m, an 11% increase over the same period of 2013. The division’s operating income increased by 43.60% from the third quarter of 2013, to $24.7m. This growth left ABF Freight’s margin at 4.72%.
ABF Freight’s growth was mainly attributable to a LTL freight environment that was positively impacted by improving economic trends, tighter industry capacity amid driver shortages, and additional LTL shipments associated with service and demand constraints in other transportation modes. Though new customers were added, the significant growth ABF Freight experienced during the quarter was strongly impacted by additional shipments from existing customers. The pricing environment was also positive and ABF Freight was able to obtain price increases needed to improve operating margins.
On a combined basis, revenue for ArcBest’s emerging, non-asset-based businesses increased by 23%. During the quarter, these businesses represented 28% of ArcBest’s total revenue, an increase compared to the first half of this year and a higher percentage than in all of 2013. Third quarter 2014 EBITDA at the non-asset-based businesses was $13.0m, an increase of 35% year-on-year. These results were largely attributable to the improving US economy and growth from key customer accounts as well as new business wins.
“We continued to see strong demand for services from the ArcBest companies in the third quarter and are pleased that our commitment to provide customers easier access to our supply chain solutions is being well received,” said Judy McReynolds, ArcBest’s President and Chief Executive Officer. “Panther, in particular, reported one of its strongest quarters ever, contributing over $4m of operating income and $7m of EBITDA. Year-to-date through September, Panther’s EBITDA was more than $20m.” McReynolds also noted that ABF LogisticsSM and ABF MovingSM also experienced strong gains in operating profit for the quarter.
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