Arkansas Best Corp. today, Oct. 22, announced third quarter 2008 net income of $15.4 million compared to third quarter 2007 net income of $18.9 million. Arkansas Best’s third quarter 2008 revenue was $495.8 million compared to third quarter 2007 revenue of $486.0 million.
“During a volatile and uncertain period in domestic and worldwide financial markets, Arkansas Best Corporation remains a stable, progressive company in a strong financial position,” said Robert A. Davidson, president and chief executive officer of the Fort Smith, Ark.-based company.
ABF Freight System Inc., the company’s largest subsidiary, had third quarter 2008 revenue of $476.3 million, essentially the same, on a per-day basis, as revenue in the third quarter of 2007. Third quarter 2008 operating income at ABF was $25.2 million compared to $28.5 million during the third quarter of 2007. ABF’s third quarter 2008 operating ratio was 94.7 percent versus an operating ratio of 93.9 percent in the third quarter of 2007.
“The increase in ABF’s third quarter operating ratio reflected the effects of a deteriorating freight environment,” Davidson said. “However, ABF’s traditional focus on controlling costs and providing increased value to its customers helped reduce the margin erosion that would be expected during a period of economic decline.”
ABF’s third quarter 2008 total weight per day decreased by 5.1 percent versus last year. “In the first half of the year, ABF’s freight tonnage seemed to stabilize compared to 2007,” Davidson said. “However, during this year’s third quarter, tonnage levels decelerated for each month of the quarter as the freight environment weakened further.”
Near the end of the third quarter, ABF announced additional service improvements in its Regional Performance Model designed to further reduced transit times in more than 24,000 lanes. Since the inception of its regional initiative, ABF has improved service in more than 33,000 station-to-station lanes representing more than 40 percent of its North American network, the company said; these service enhancements allow ABF to provide comprehensive and reliable service within the next-day and second-day LTL market.
“The current freight environment has now lasted for over two years,” Davidson said. “In addition, the rapid changes that have recently occurred in the credit markets appear to be the most dramatic our country has experienced in over 70 years. During a period of economic decline and financial upheaval, shippers and investors seek companies with financial strength, prudent management, operational stability and a sharp focus on increasing value in the marketplace. In the past, I’ve spoken about a ‘flight to quality.’ During times like these, that idea has never been more true.”