Net income during 2013 for Fort Smith-based Arkansas Best Corp. was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008. The per share earnings of 59 cents also blew past the consensus estimate of 47 cents per share.
Full year revenue for the transportation holding company was $2.299 billion, up more than 11% compared to the $2.065 billion in 2012. The largest subsidiary of Arkansas Best is ABF Freight System, one of the largest less-than-truckload carriers in the U.S.
Fourth quarter net income was $10.3 million, a big shift from the $7.9 million loss during the same quarter in 2012. The per share earnings of 38 cents also beat the 31 cents per share that was the consensus estimate among the analysts who follow the company.
However, the company had to deduct $1.435 million from fourth quarter earnings for expenses related to the new collective bargaining agreement with the International Brotherhood of Teamsters. That charge and other smaller accounting changes pushed recording fourth quarter net income to $8.4 million, or 31 cents per share.
"After a very challenging year in which we negotiated and implemented a new five-year labor agreement with the International Brotherhood of Teamsters, I am very pleased to report that ABF Freight ended the year with solid profitability, substantially reversing the unacceptable trend of losses in 2012," Judy McReynolds, Arkansas Best President and CEO, said in the report issued early Thursday (Jan. 30). "While that lengthy process was ongoing, we continued to make important strategic investments in our emerging businesses, all of which reported increased revenues and are well positioned for additional growth in 2014."
Arkansas Best Corp. officials announced Oct. 30 that the ABF National Master Freight Agreement was ratified by the Teamsters’ ABF National Negotiating Committee. The new contract covers about 7,500 employees of ABF Freight System who are members of the union. Most of those workers are drivers. The company has said the agreement will result in savings of between $55 million and $65 million a year. The savings come from an immediate 7% wage reduction that is recovered by the fifth year of the contract. The wage and benefit reductions were set to begin Nov. 3. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of those workers are drivers.
Arkansas Best shares (NASDAQ: ABFS) were set to open Thursday at $32.81. During the past 52 weeks the share price has ranged from a $35.96 high to a $9.62 low.
The City Wire will update this story later this morning.