ArcBest awaiting LTL demand inflection

ArcBest reported flattish metrics for February arsenic it awaits a much meaningful crook successful less-than-truckload demand. Results astatine its asset-based conception appeared to decelerate from January, but the prior-year examination was skewed by a peculiarly anemic January 2025.

The asset-based unit, which includes LTL subsidiary ABF Freight, recorded nary year-over-year alteration to gross per time for February, according to a filing with the Securities and Exchange Commission. A 2% y/y summation successful tonnage (entirely driven by higher value per shipment) was offset by a 2% diminution successful gross per hundredweight, oregon yield. (Higher shipment weights and little substance surcharges were headwinds to the output calculation.)

ArcBest’s (NASDAQ: ARCB) last results for January came successful a small amended than antecedently disclosed. Tonnage was 9.9% higher y/y versus its archetypal anticipation for an 8% increase, which was provided connected a quarterly telephone astatine the extremity of January. The notable y/y deceleration successful measurement maturation during February was owed to January’s casual prior-year comp (negative-9.2%). On a two-year-stacked comparison, tonnage was up 0.7% successful January and level successful February. (Its regular gross and output metrics were adjacent to level connected a two-year look arsenic well.)

The institution said connected the January telephone it had taken connected much dynamically priced truckload shipments—pushing shipment weights higher but dragging yields lower—due to weakness crossed the manufacturing and lodging sectors.

ArcBest antecedently forecast first-quarter tonnage per time to summation by 4% to 5% y/y, which would beryllium level to up 1% connected a two-year-stacked comparison. Quarter-to-date, tonnage is up 6% y/y.

Manufacturing enactment was modestly successful enlargement territory for a 2nd consecutive period successful February. The Purchasing Managers’ Index registered a 52.4 speechmaking during the caller month, which was 20 ground points little than January. (A speechmaking supra 50 signals enlargement portion 1 beneath 50 indicates contraction.) The dataset has mostly been successful antagonistic territory for implicit 3 years.

The caller orders subindex—an indicator of aboriginal activity—came successful astatine 55.8. (Inflections successful PMI information usually pb LTL volumes by a fewer months.)

The asset-based portion reported a 3% sequential output summation successful February (revenue per shipment was 2% higher) “due to pricing gains” and a measurement up successful substance surcharge revenue. Contract pricing renewals averaged 5% successful the 4th quarter, the highest summation successful six quarters and up 9.5% connected a two-year-stacked comparison.

ArcBest reiterated its anterior asset-based operating borderline guidance for the archetypal quarter. The portion usually sees 260 ground points of sequential deterioration, but the institution expects to curb the degradation to conscionable 100 to 200 bps this twelvemonth fixed outgo actions and the little starting constituent (“softer-than-normal 4th quarter”). The usher implies a 97.7% adjusted OR astatine the midpoint, 180 bps worse y/y.