New York, September 9 (Kiran News) — ArcBest Corp. (NASDAQ: ARCB) lowered its third-quarter margin outlook for its asset-based segment, citing soft demand and higher operating costs, even as revenue showed modest year-over-year growth in August.
August Performance
Asset-based revenue per day rose 2% y/y in August.
Growth was driven by a 2% increase in tonnage, offset by flat yields.
Daily shipments rose 5%, but average shipment weight fell 3%, reflecting weakness in manufacturing and housing activity.
ArcBest said it is winning more freight from core accounts, but overall demand remains weak, with lighter shipment weights weighing on results.
Industry Backdrop
Manufacturing activity continued to contract in August, with the Purchasing Managers’ Index (PMI) at 48.7 — below the neutral 50 mark for the 32nd time in 34 months. New orders in the PMI moved into slight expansion at 51.4, hinting at potential improvement, but remained below the 52.1 threshold typically needed for sustained growth.
Margin Guidance Revision
ArcBest now expects its asset-based operating ratio (OR) to be flat to 50 basis points worse in Q3 compared to Q2. That implies an adjusted OR of 93.1% at the midpoint, about 210 bps worse y/y.
Previous guidance: 70 bps of sequential improvement, implying a 92.1% OR, consistent with seasonal patterns.
Exclusion: The outlook does not include a pretax gain of ~$16 million from a real estate sale expected in the quarter.
Higher cartage expenses also pressured margins, as the company relied more on outside capacity to handle new business wins. ArcBest expects those costs to ease as staffing levels normalize.
Pricing Adjustments
ArcBest said recent reviews identified account- and lane-level pricing adjustments that should lift LTL pricing going forward. The company implemented a 5.9% general rate increase (GRI) on August 4, following a similar increase in September 2024.
Yield trends:
Down 3.1% in Q2 2025.
Down 1.2% in July.
Flat in August.
Asset-Light Segment
ArcBest reiterated guidance for its asset-light unit (including truck brokerage), expecting breakeven to $1 million in adjusted operating income in Q3. Revenue for the segment is down 8% y/y through the first two months of the quarter, with a 10% drop in revenue per shipment partly offset by a 2% increase in volumes.
Market Reaction
Shares of ArcBest fell 3.2% in early Tuesday trading, while the S&P 500 was up 0.1%.
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