Logistics provider ArcBest Corp. (NASDAQ: ARCB) reported significantly better than expected results in the first quarter of 2020, posting adjusted earnings per share of $0.36 compared to consensus estimate calling for an $0.11 per share loss.
The company’s asset-based division, which includes less-than-truckload (LTL), reported a 1.9% year-over-year increase in revenue to $516 million as tonnage per day increased 4.6%, mostly offset by a 4.3% decline in revenue per hundredweight, or yield. Excluding fuel surcharges, which were lower in the period as diesel prices declined year-over-year, LTL yield increased in the low single digit percentage range compared to the first quarter of 2019.
The asset-light division reported a 4.1% year-over-year revenue decline at $217 million and an operating loss of $369,000. Declines in demand for expedited delivery options and truckload brokerage were cited as the reasons.
ArcBest reported a “significant” decline in business during April, resulting in a 20% drop in consolidated revenue compared to April 2019. The company has implemented $15 million to $20 million in cost reduction initiatives, including workforce reductions, a 15% cut to non-union employee salaries, a decrease in board compensation and suspended the 401k match.
The company reported undisclosed, but positive earnings before interest, taxes, depreciation and amortization (EBITDA) for the month of April.
At the end of March, the company drew down the remaining $180 million available on its revolving credit facility and borrowed $45 million under its accounts receivable securitization program to bolster its liquidity. ArcBest also lowered its net capital expenditures (net capex) by 30% to a range of $95 million to $105 million to preserve capital. The company plans to spend $18 million less on equipment purchases than originally anticipated.
ArcBest ended April with $12 million more in cash and short-term investments than it had in debt.
The company will host a conference call to discuss these results with analysts and investors at 9:30 a.m. Eastern time.