Arkansas Best slumped 8% after missing third-quarter earnings targets by a nickel and pointing to softness in the truckload freight market.
The Fort Smith, Ark., transportation giant made $31.5 million, or $1.24 a share, for the quarter ended Sept. 30. That's down from the year-ago continuing operations profit of $40.2 million, or $1.58 a share. Excluding certain items, latest-quarter earnings were $1.26 a share.
Revenue rose to $507 million from $463 million a year earlier.
Analysts surveyed by Thomson Financial were looking for a $1.31-a-share profit on sales of $503 million.
"ABF's quarterly operating ratio wasn't quite as good as the superior number that we posted in the third quarter of last year, but it still reflected an excellent result," the company said. "In the third quarter of this year, ABF took aggressive steps to improve service levels to customers. In addition to reducing spot volume tonnage, ABF has added approximately 2,000 new employees throughout its network, resulting in a net increase of over 750 in ABF's total employee count since the first of the year. The additional employees also allowed us to reduce our rail usage and thus increase the amount of freight moving in ABF's linehaul network. This successful recruiting effort will also position ABF for future growth, especially as we expand in the regional markets."
The company said since the end of the third quarter, total tonnage per day has dropped by the mid-to-high single digits from a year ago. Excluding the impact of reductions in spot volume tonnage that ABF continues to experience, the percentage change in early October tonnage is flat to down in the low, mid-single digits compared to the same period last year.
"In early October, ABF began to experience a slowdown in freight tonnage that appears to be related mostly to retail customers who have delayed the timing of normal holiday orders," said CEO Robert Davidson. "In addition, based on the continuing decline of ABF's spot volume tonnage, we suspect that this slowdown is related to softness in the truckload market."
Shares fell $3.63 to $41.08.
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