Transportation holding company Arkansas Best Corporation said its net earnings for the third quarter of 2007 slid hurt by sluggish freight environment and higher workers' compensation claims offset in part by some improvement in third-party casualty claims.
The Fort Smith, Arkansas headquartered said net income for the third quarter ended September 30, 2007 fell to $18.9 million, or $0.75 per common share from $31.5 million, or $1.24 per share a year earlier. 9 analysts, on average, expected quarterly earnings of $0.88 per share, according to a poll by Thomson Financial.
Operating income for the three-month period declined to $28.19 million from $49.79 million in the comparable period last year. The company's third quarter revenue slid to $479.8 million from $507.3 million in the year-ago period. 6 analysts had a revenue consensus estimate of $485.36 million for the quarter.
The company said its largest subsidiary ABF Freight System, Inc. reported third quarter revenue of $462.2 million, reflecting a per-day decrease of 6.4% from third quarter 2006. Operating income at ABF fell to $28.5 million from $49.4 million a year earlier.
Operating ratio was 93.8% compared with 90.0% in the third quarter of 2006. ABF's third quarter 2007 total weight per day declined by 5.8% compared with third quarter of the previous year. ABF's current labor contract with its unionized employees will expire on March 31, 2008. ABF expects to begin labor negotiations next month and anticipates a timely agreement.
The company said, "Beginning in the fourth quarter, the year-over-year impact on operating results of the RPM investment should be reduced as we start to compare back to prior-year periods that included those same costs. ABF remains fully committed to this initiative, and we anticipate that RPM will positively impact future revenue growth and profitability as we gain additional market share."
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