Arkansas Best struggles with higher costs in 4Q
FORT SMITH, Ark. (AP) — Arkansas Best Corp.'s shares slumped Wednesday after the trucking company posted a larger-than-expected fourth-quarter loss on modest revenue gains and higher expenses.
The Fort Smith, Ark.-based trucking company has been struggling for several quarters with soft demand and an increase in operating expenses. It also faced an accounting adjustment in its fourth-quarter for higher worker compensation costs. The company is also in contract negotiations in an effort to lower some of its expenses or potentially shutter sites.
Arkansas Best posted a loss of $7.9 million, or 31 cents per share, for the quarter. That is compared with net income of $1.4 million, or 5 cents per share, in the prior year. The most recent quarter's results include an after-tax charge of $2.4 million, or 9 cents per share, for the workers' compensation expense, which would result in an adjusted loss of 22 cents a share.
The company reported revenue of $537 million for the quarter, versus $463.2 million.
Analysts polled by FactSet were expecting the company to post an adjusted loss of 4 cents per share on revenue of $512.6 million.
"There continue to be many questions about the economy and its impact on the transport markets in which we compete," Arkansas Best President and Chief Executive Officer Judy McReynolds said in a statement. "Looking ahead, we recognize that ABF and all of our other subsidiaries must generate profits regardless of the economic climate."
She said that management hopes its ongoing contract negotiations will help its cost structure and improve the flexibility of its operations in the future.
In late December, the company exchanged initial contracts with the Teamsters National Freight Industry Negotiating Committee. The company said it is trying to reach a national contract that provides uniform terms for all of its local operations. The company says that without changes, it will need to close some terminals and distribution centers.
The union said earlier this month that the company is trying to undo 50 years of bargaining history and says it has thus far failed to provide cost analysis of its specific proposals at its fingertips, suggesting it was not prepared to engage in legitimate bargaining. The union declined to comment further on the matter on Wednesday.
Arkansas Best's stock was down 25 cents, or about 2 percent, at $10.38 in afternoon trading after dipping to $9.50 earlier in the day. Its shares are in a 52-week trading range of $6.43 to $19.50.