Arkansas Best Corp., propelled by strong fourth-quarter results from its less-than-truckload (LTL) carrier and expedited transportation units, said today it swung to a full-year gain in 2013 operating income compared to a loss in 2012.
Arkansas Best, based in Fort Smith, Ark., posted a 2013 operating income of $15.8 million, compared to a deficit of $9.2 million in 2012. Revenues rose to $2.3 billion from $2.06 billion.
In the fourth quarter, the company posted operating income of $10.3 million versus a loss of $7.9 million in 2012. Operating revenue in the quarter rose more than $40 million year-over-year to $578.4 million, the company said.
ABF Freight System Inc., the LTL carrier which accounts for three-quarters of Arkansas Best's operating revenue, posted operating income of $9.8 million in the fourth quarter compared to a loss of $14 million in the year-earlier quarter. Operating revenue rose to $436 million from $414 million. ABF posted full-year operating revenue of $1.76 billion, a $60 million increase over 2012 results.
On Oct. 31, ABF and union workers represented by the Teamsters union reached a new five-year collective bargaining agreement. The compact, which was ratified after nearly a year of intense and difficult negotiations, took effect Nov. 3. Workers agreed to concessions and work-rule changes that ABF said will save it between $55 million and $65 million a year over the contract's life. The carrier's labor costs were traditionally the highest in the LTL sector.
Arkansas Best said its fourth quarter and, by extension, full-year results benefitted from the shipping marketplace finally getting clarity into ABF's labor situation. Kathy Fieweger, an Arkansas Best spokeswoman, said ABF chose not to seek normalized rate increases because of the uncertainty over its labor situation. Once the agreement was ratified, however, the company was "able to return to more normal pricing activities," Fieweger said in an e-mail.
The company's Panther Expedited Services Inc. unit reported a tripling of fourth quarter operating income from the year-earlier period. Revenue for the unit rose more than $6 million year-over-year to $67.3 million. Arkansas Best acquired Panther in 2012. Arkansas Best's domestic and global transport management unit reported a 43-percent gain in fourth-quarter revenue to $30.6 million, the company said. The unit's operating income increased slightly.
Traders and investors bid up Arkansas Best stock by $1.07 a share today to $33.40 a share. Less than a year ago, the stock was trading near $10 a share.