ArcBest (NasdaqGS:ARCB) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

ArcBest Corporation (NasdaqGS:ARCB) is scheduled to report Q3 earnings results before markets open for trading on November 3, 2020.

The company is expected to report earnings of $0.82/share on revenue of $780.8 million. The consensus earnings per share (EPS) of $0.82/share is based on a poll of 10 analysts and represents a decline in eps of −19.3% over the same quarter last year, when the company reported earnings of $1.02/share.

The revenue forecast of $780.8 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −0.9%. Last year the company reported $787.6 million in revenue for the quarter.

Expected to report EPS contraction of −19.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $780.75 $787.56 −0.9%
EPS $0.82 $1.02 −19.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from ArcBest Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0 $0.67 44,270.9% Beat
Q1, 2020 -$0.12 $0.36 400.9% Beat
Q4, 2019 $0.45 $0.56 24.6% Beat
Q3, 2019 $0.87 $1.02 17.7% Beat
Q2, 2019 $0.94 $0.93 −0.7% Missed
Q1, 2019 $0.29 $0.17 −42.2% Missed
Q4, 2018 $0.93 $1.01 8.2% Beat
Q3, 2018 $1.12 $1.44 28.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −3.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $32.11 $30.90 −3.8% Decline
May 5, 2020 $19.24 $20.62 7.2% Increase
January 30, 2020 $25.18 $22.31 −11.4% Decline
October 31, 2019 $29.53 $29.54 0.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.88, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.88 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

ArcBest Corporation is currently trading at $30.17/share, down −4.0% for the day. The company is trading at approximately 84.0% of its 52-week high of $36.15/share. The company’s stock price is down −2.4% since the last earnings report and down −7.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.73 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:ARCB Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 26.91 and a forward P/E multiple of 13.27.

ArcBest Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.99. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $30.17
P/E Ratio 26.9x
P/E Ratio (Fwd) 13.3x
PEG Ratio −0.4
Total Debt / Total Capital 43.7%
Levered Free Cash Flow $106.7 million
EV / EBITDA 4.6x

Finbox

ArcBest Corporation is a small-cap stock with a market capitalization of $799.7 million and a total enterprise value of $845.5 million. The company operates in the Industrials sector and the Road & Rail industry.

ArcBest Corporation provides freight transportation services and integrated logistics solutions worldwide. It operates through three segments: Asset-Based, ArcBest, and FleetNet. The Asset-Based segment transports general commodities, such as food, textiles, apparel, furniture, appliances, chemicals, nonbulk petroleum products, rubber, plastics, metal and metal products, wood, glass, automotive parts, machinery, and miscellaneous manufactured products through less-than-truckload services. It also offers motor carrier freight transportation services to customers in Mexico through arrangements with trucking companies. The ArcBest segment provides expedite freight transportation services to commercial and government customers; premium logistics services, such as deployment of specialized equipment to meet linehaul requirements; and international freight transportation with air, ocean, and ground services. It also offers third-party transportation brokerage services by sourcing various capacity solutions, including dry van over the road and intermodal, temperature-controlled and refrigerated, flatbed, intermodal or container shipping, and specialized equipment; full-container and less-than-container load ocean transportation services; warehousing and distribution services; managed transportation services; and moving services to ‘do-it-yourself’ consumer and corporate account employee relocations, as well as provides final mile, time critical, product launch, warehousing, retail logistics, supply chain optimization, and trade show shipping services. The FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles through third-party service providers. The company was formerly known as Arkansas Best Corporation and changed its name to ArcBest Corporation in May 2014. ArcBest Corporation was founded in 1923 and is headquartered in Fort Smith, Arkansas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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