Supply-Chain Specialist ArcBest Boosted By Demand
Anyone surprised by ArcBest Corporation’s (NASDAQ: ARCB) Q3 results isn’t paying attention to the freight market. ArcBest Corporation operates as an integrated trucking outfit with specialization in LTL, supply-chain logistics, and intermodal shipping making it one of the best-positioned outfits in a high-demand industry. The company’s results not only set a record but they also beat the consensus estimates and the outlook for future growth is very positive. Like others in the industry, ArcBest is investing in growth via bolt-on acquisitions, technology, and manpower and those investments are paying off.
ArcBest Foreshadow’s Strong Results With Repurchase Plan
ArcBest Corporation foreshadowed its strong Q3 results by announcing a new repurchase plan just a day before the results were released. The company announced an Accelerated Buyback plan worth $100 million on top of the $50 million left under the current plan. The new plan begins now, following the Q3 release, and is worth about 4.35% of the market cap.
As for results, ArcBest reported $1.01 billion in net consolidated revenue which is good for the 3rd company record in a row. The revenue is also good for growth of 27.9% over last year and beat the consensus estimate by 100 basis points. The 100 basis points isn’t much of a beat but noteworthy in light of the high bar set by the analysts. Strength was reported in all operating segments with notable strength in the LTL and intermodal operations. Gains were driven by both volume and pricing which resulted in a 21.2% increase in revenue per day. On a tonnage basis, tonnage per day is up 2.4% on a 0.5% increase in shipments that was compounded by a 17.1% increase in revenue per hundredweight.
Moving on to the earnings there is some mixed data in relation to the analyst’s estimates but that is the worst we can say. The company’s GAAP earnings more than doubled from last year to $2.38 per share but missed the consensus by $0.06. On an adjusted basis, accounting for reinvestment in the business, the company’s $2.59 in earnings is also up more than double from last year and beat the consensus by $0.13.
The Analysts Are Behind The Curve On ArcBest Corporation
The analysts are overwhelmingly bullish on ArcBest Corporation with sentiment and the consensus estimate both strengthening over the past 30 and 90 day periods. The Marketbeat.com consensus price target is up 11% over the past 90-days and 8% in the last 30 but the analysts are still trailing the price action. Price action is up more than 2.5% in the wake of the report and has every indication that price action will move higher. There have been no analysts reports since the earnings were released but we think that is going to change soon. The company is obviously able to execute despite headwinds in the economy and growth is in the forecast.
The Technical Outlook: ArcBest Rockets To New Highs
Shares of ArcBest Corporation are up more than 2.5% in the wake of the earnings report and are on track to set more new highs this year. Not only does the candle confirm support at the previous all-time high but the indicators are both consistent with rising prices. The MACD and stochastic are both showing bullish crossovers that we see taking this stock up to the Marketbeat.com high price target of $115 or higher.
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