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ArcBest (ARCB) to Report Q3 Earnings: What's in the Cards?

Escalated operating expenses are likely to get reflected in ArcBest's (ARCB) third-quarter 2021 performance.

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This story originally appeared on Zacks

ArcBest Corporation ARCB is scheduled to report third-quarter 2021 earnings on Nov 2, 2021, before market open.  

- Zacks

The company has a stellar surprise record, with earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of 40.8%, on average. The Zacks Consensus Estimate for third-quarter earnings has been revised 30.7% upward in the past 60 days.

Let’s take a look at the factors that might have shaped the company’s September-quarter performance.

ArcBest Corporation Price and EPS Surprise

 

ArcBest Corporation Price and EPS Surprise

ArcBest Corporation price-eps-surprise | ArcBest Corporation Quote

 

We expect ArcBest’s performance in the September quarter to have been aided by improving freight conditions in the United States. Rising freight demand is expected to have driven revenues in its asset-based business, which accounts for a bulk of the top line. The Zacks Consensus Estimate for third-quarter revenues from asset-based business is currently pegged at $677 million, indicating 20.5% growth from the figure reported in third-quarter 2020.

Total billed revenue per hundredweight on asset-based shipments is likely to have increased on the company’s asset-based pricing initiatives. The Zacks Consensus Estimate for the metric (excluding fuel surcharges) suggests an increase of 18.2% from the third-quarter 2020 reported value.

However, supply chain disruptions (owing to a surge in Delta-variant cases) might have dented the quarterly performance.

The company’s operating ratio (operating expenses, as a percentage of revenues) might have deteriorated in the to-be-reported quarter due to high operating expenses. The Zacks Consensus Estimate for the metric is pegged at 99, which suggests a deterioration from third-quarter 2020’s reported figure of 98.

With oil prices moving north, fuel cost is likely to have been high in the to-be-reported quarter. High fuel costs are likely to have bumped up operating expenses, which might have had a negative impact on the bottom line.

What Does the Zacks Model Say?

The proven Zacks model does not predict an earnings beat for ArcBest this time around. The combination of a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP:  ArcBest has an Earnings ESP of 0.00%, since the Most Accurate Estimate and Zacks Consensus Estimate are pegged at $2.47. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank:  ArcBest sports a Zacks Rank of 1 currently.

Highlights of Q2 Earnings

ArcBest’s earnings (excluding 3 cents from non-recurring items) of $1.97 per share surpassed the Zacks Consensus Estimate of $1.60. Operating revenues of $653 million surpassed the consensus mark of $635 million and increased 2.8% on a year-over-year basis.

Stocks to Consider

Investors interested in the broader Transportation  sector may also consider Saia, Inc. SAIA, Copa Holdings, S.A. CPA and Schneider National, Inc. SNDR. These stocks possess the right combination of elements to beat on earnings this reporting cycle.  

Saia has an Earnings ESP of +1.32% and is Zacks #2 Ranked, presently. The company will release third-quarter 2021 results on Oct 28.

Copa Holdings has an Earnings ESP of +25.74% and a Zacks Rank #3. The company will report third-quarter results on Nov 17.

Schneider National has an Earnings ESP of +2.37% and is currently a #2 Ranked player. The company will release third-quarter 2021 results on Oct 28.

 



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