Ground Transportation Stocks Q2 Recap: Benchmarking ArcBest (NASDAQ:ARCB)

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how ArcBest (NASDAQ:ARCB) and the rest of the ground transportation stocks fared in Q2.

The growth of e-commerce and global trade continues to drive demand for shipping services, especially last-mile delivery, presenting opportunities for ground transportation companies. The industry continues to invest in data, analytics, and autonomous fleets to optimize efficiency and find the most cost-effective routes. Despite the essential services this industry provides, ground transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.

The 16 ground transportation stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1%.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Ground Transportation stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.

ArcBest (NASDAQ:ARCB)

Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ:ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.

ArcBest reported revenues of $1.08 billion, down 2.3% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ operating margin and earnings estimates.

“I am incredibly proud of our employees’ commitment to utilizing our quality process in pursuit of excellence every day. This dedication has led to significant improvements in our operational execution, with ABF Freight achieving its best on-time service performance in recent years,” said Judy R. McReynolds, ArcBest Chairman and CEO.

ArcBest achieved the biggest analyst estimates beat of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 5.7% since reporting and currently trades at $104.89.

Read our full report on ArcBest here, it’s free.

Best Q2: Heartland Express (NASDAQ:HTLD)

Founded by the son of a trucker, Heartland Express (NASDAQ:HTLD) offers full-truckload deliveries across the United States and Mexico.

Heartland Express reported revenues of $274.8 million, down 10.3% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ earnings estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.7% since reporting. It currently trades at $11.75.

Is now the time to buy Heartland Express? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Hertz (NASDAQ:HTZ)

Started with a dozen Model T Fords, Hertz (NASDAQ:HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.

Hertz reported revenues of $2.35 billion, down 3.4% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Hertz delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 20.6% since the results and currently trades at $3.25.

Read our full analysis of Hertz’s results here.

Knight-Swift Transportation (NYSE:KNX)

Covering 1.6 billion loaded miles in 2023 alone, Knight-Swift Transportation (NYSE:KNX) offers less-than-truckload and full truckload delivery services.

Knight-Swift Transportation reported revenues of $1.85 billion, up 18.9% year on year. This print was in line with analysts’ expectations. However, it was a slower quarter as it recorded a miss of analysts’ earnings estimates.

Knight-Swift Transportation delivered the fastest revenue growth among its peers. The stock is up 5.2% since reporting and currently trades at $51.50.

Read our full, actionable report on Knight-Swift Transportation here, it’s free.

Schneider National (NYSE:SNDR)

Employing thousands of drivers across the country to make deliveries, Schneider (NYSE:SNDR) makes full truckload and intermodal deliveries regionally and across borders.

Schneider National reported revenues of $1.32 billion, down 2.2% year on year. This result missed analysts’ expectations by 2.7%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ operating margin estimates but a miss of analysts’ Truckload revenue estimates.

The stock is up 5% since reporting and currently trades at $28.25.

Read our full, actionable report on Schneider National here, it’s free.

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