ArcBest awaiting LTL demand inflection

Core Viewpoint - ArcBest is experiencing flat metrics in February as it anticipates a more significant shift in less-than-truckload (LTL) demand, with asset-based segment results showing a slowdown compared to January, influenced by a weak January 2025 comparison [1] Financial Performance - The asset-based unit, including LTL subsidiary ABF Freight, reported no year-over-year change in revenue per day for February, with a 2% year-over-year increase in tonnage offset by a 2% decline in revenue per hundredweight [2] - January results showed a 9.9% year-over-year increase in tonnage, better than the initial expectation of 8%, while February's volume growth decelerated due to an easy prior-year comparison of negative 9.2% [2] - On a two-year stacked comparison, tonnage was up 0.7% in January and flat in February, with daily revenue and yield metrics also close to flat [2] Market Conditions - Manufacturing activity showed modest expansion in February, with the Purchasing Managers' Index (PMI) at 52.4, slightly down from January, indicating ongoing expansion [4] - The new orders subindex, a future activity indicator, was at 55.8, suggesting potential increases in LTL volumes in the coming months [5] Pricing and Margins - The asset-based unit reported a 3% sequential yield increase in February, attributed to pricing gains and higher fuel surcharge revenue, with contract pricing renewals averaging a 5% increase in Q4, the highest in six quarters [5] - ArcBest expects to limit the typical sequential deterioration of asset-based operating margins to 100 to 200 basis points this year, compared to the usual 260 basis points, due to cost actions and a softer-than-normal Q4 [6]