ArcBest beats in Q3, warns of Q4 margin hit

Core Viewpoint - ArcBest exceeded third-quarter earnings expectations but anticipates significant margin deterioration in both business segments for the fourth quarter [1] Financial Performance - Adjusted earnings per share for ArcBest were reported at $1.46, surpassing consensus estimates by $0.09 but down $0.18 year-over-year [1] - Consolidated revenue reached $1.05 billion, slightly above expectations [1] Asset-Based Segment - The asset-based unit, including ABF Freight, experienced a 2% year-over-year increase in revenue per day, driven by a 2% increase in tonnage, although this was partially offset by a 1% decline in yield [2] - Daily shipments increased by 4%, while the weight per shipment declined by 2%, contributing to the tonnage growth [3] - Tonnage comparisons showed increases of 1.3% in July, 2.4% in August, and 3.3% in September, but a 1% decline year-over-year was noted in October [4] Operating Ratios and Margins - The adjusted operating ratio was reported at 92.5%, which is 150 basis points worse year-over-year but 30 basis points better sequentially [6] - Year-over-year cost increases in labor and benefits, purchased transportation, and depreciation and amortization negatively impacted margins [7] - The company forecasts a 400 basis point margin deterioration from Q3 to Q4, expecting an adjusted operating ratio of 96.5%, which would be 450 basis points worse year-over-year [8] Asset-Light Segment - The asset-light segment reported adjusted operating income of $1.6 million, marking a second consecutive operating profit after seven losses [9] - For the fourth quarter, the company anticipates an adjusted operating loss of $1 million to $3 million in this segment [9]