The logistics firm raised its asset-based unit margin outlook after stronger pricing and fuel surcharge benefits drove April results above expectations.
ArcBest increased its second-quarter operating margin guidance for its asset-based unit, including ABF Freight, by 200 basis points at both ends of the range. The revised outlook implies a 90.8% adjusted operating ratio, 200 bps better year over year and well above typical sequential improvement of 350 bps from Q1 to Q2.
The upgrade follows April results that exceeded expectations, with revenue per day up 10.9% year over year versus a 9% preliminary estimate. Tonnage and yield also outperformed, while May revenue per day rose 9% year over year, supported by a 9% increase in truckload shipments.
Management attributed the improved outlook to disciplined pricing, fuel price movements, and cost optimization efforts. Less-than-truckload fuel surcharges contributed to margin expansion as diesel prices rose.