FORT SMITH, Ark. — Less-than-truckload carrier Arkansas Best Corp. on Friday reported a wider first-quarter loss due to still-weak freight levels, low pricing and higher costs.
The company posted a loss of $21.3 million, or 85 cents per share, compared with a year-earlier loss of $18.2 million, or 73 cents per share.
Revenue rose 6 percent to $359.9 million from $339.7 million in the first quarter of 2009 as tonnage increased at its ABF Freight unit. But costs also climbed to $395.2 million from $368.3 million last year.
Analysts polled by Thomson Reuters had expected a smaller loss of 63 cents per share on revenue of $353.5 million, on average.
The company is hoping to secure a wage cut deal with workers to help it get back to profitability. The deal, which calls for a 15 percent pay cut for union workers through 2013, was tentatively approved by the Teamsters earlier this week. But it still needs to be voted on by union members. Nonunion employees have already taken some compensation concessions.
“In order for Arkansas Best’s operating results to improve in a meaningful way, we need further increases in freight demand, strong improvements in pricing and the positive financial impact of wage concessions,” said President and CEO Judy R. McReynolds in a statement.
Arkansas Best is the second trucker to ask its employees to take pay cuts to preserve its cash. YRC Worldwide asked its workers for a total 15 percent wage reduction last year as it struggled in the recession.
In a note to clients, Stifel Nicolaus analyst David Ross reiterated his “Sell” rating “on the shares of this good company that just finds itself in a lousy spot.”
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
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