Arkansas Best Corporation today announced third quarter 2008 net income of $15.4 million, or $0.61 per diluted common share, compared to third quarter 2007 net income of $18.9 million, or $0.75 per diluted common share. 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, Arkansas Best President and Chief Executive Officer.
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% versus an operating ratio of 93.9% in the third quarter of 2007. "The increase in ABF's third quarter operating ratio reflected the effects of a deteriorating freight environment," said Mr. Davidson. "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," said Mr. Davidson.
"Compared to unusually high costs in the third quarter of last year, workers' compensation claims experience had a favorable impact of 120 basis points on ABF's third quarter 2008 operating ratio," said Mr. Davidson. "On a year-to-date basis, workers' compensation costs continue to be well below ABF's ten-year historical average and had a favorable impact of 60 basis points on the operating ratio so far this year."
ABF's third quarter 2008 total weight per day decreased by 5.1% versus last year. "In the first half of the year, ABF's freight tonnage seemed to stabilize compared to 2007. However, during this year's third quarter, tonnage levels decelerated for each month of the quarter as the freight environment weakened further," said Mr. Davidson.
Near the end of the third quarter, ABF announced additional service improvements in its Regional Performance Model (RPM(R)) that further reduced transit times in over 24,000 lanes. Since the inception of its regional initiative, ABF has improved service in over 33,000 station-to-station lanes representing more than 40% of its North American network. These service enhancements allow ABF to provide comprehensive and reliable service within the next-day and second-day LTL market. "This dramatic expansion of our regional service, coupled with ABF's best-in-class long-haul capabilities, allows one carrier to provide full North American coverage with the cargo care, web visibility, competitive costs, reliable transit times and personal attention that customers require to support their own businesses," said Mr. Davidson.
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