ArcBest (ARCB) shares ended the last trading session 4.2% higher at $173.22. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 40.5% gain over the past four weeks.
The recent announcement of a 5.9% rate hike and the gradual recovery of the Less-Than-Truckload freight sector lifted the ARCB shares. In fact, ARCB recently provided improved guidance for LTL and asset-light units. ArcBest is now calling for the operating ratio (operating expenses as a % of revenues) to improve by 600 to 700 basis points sequentially (earlier guidance was for an improvement of 400 to 500 basis points). The improved outlook reflects disciplined execution on pricing initiatives, the impact of recent fuel price movements, and continued progress on cost optimization, network efficiency, and technology driven productivity measures.ArcBest’s asset-light segment, which includes truck brokerage, is now expected to record adjusted operating income of $3 million to $5 million in the second quarter (previous guidance was for $1-$2 million), driven by yield discipline, cost management, and productivity gains.
This freight transportation and logistics company is expected to post quarterly earnings of $1.87 per share in its upcoming report, which represents a year-over-year change of +37.5%. Revenues are expected to be $1.15 billion, up 12.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For ArcBest, the consensus EPS estimate for the quarter has been revised 7.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ARCB going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
ArcBest is a member of the Zacks Transportation - Truck industry. One other stock in the same industry, JB Hunt (JBHT), finished the last trading session 0.3% lower at $287.19. JBHT has returned 19.7% over the past month.
JB Hunt's consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $1.7. Compared to the company's year-ago EPS, this represents a change of +29.8%. JB Hunt currently boasts a Zacks Rank of #2 (Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
