Arkansas Best Corp. on Friday, Oct. 28, announced third-quarter 2011 net income of $12.3 million compared to a net loss of $0.7 million in the third quarter of 2010, and revenue of $510.9 million, a per day increase of 14.7 percent from $445.5 million.
Arkansas Best says the performance reflects strong improvement from its largest subsidiary, ABF Freight System, which produced healthy revenue and profit growth that resulted from improved account pricing in the midst of moderating tonnage levels. ABF improved its third quarter operating ratio by four and a half operating points versus the same period last year and by more than two operating points versus this year’s second quarter.
“The ABF team is to be congratulated for producing better results in the face of an uncertain economic environment,” said Judy McReynolds, president and chief executive officer of the Fort Smith, Ark.-based company. “In looking ahead, we are prepared to appropriately adjust resources to business levels while maintaining a high level of service for our customers. Our blend of investments in people and technology as well as the unique logistics services provided to our customers put us in a good position as we cultivate opportunities for future growth and new offerings.”
ABF Freight System recorded revenue of $466.3 million compared to $409.9 million. Tonnage per day decreased 2.0 percent, while total billed revenue per hundredweight was $27.10 compared to $23.38, an increase of 15.9 percent, including increases in fuel surcharges. Operating income was $18.3 million compared to an operating loss of $2.6 million. ABF’s operating ratio was 96.1 percent compared to 100.6 percent.
“Since March of this year, ABF’s year-over-year change in monthly tonnage has moderated, and beginning in August, tonnage has been below that of the same period last year,” McReynolds said. “So far in October, ABF’s tonnage is lower than last October by between six and seven percent, but because of greatly improved yields, ABF revenues continue to be ahead of the same period last year by approximately 5 percent. We attribute the tonnage decline to weakening economic conditions, our efforts to improve account pricing and more difficult comparisons from last year.”
McReynolds said that despite the softening in ABF’s freight, pricing levels have improved significantly from recent recessionary levels. “As we move forward, we will continue to build on the strong foundation provided by ABF’s nationwide network and the relationship-forming skills of its well-trained sales force to offer additional services and to take advantage of new growth opportunities.”