J.B. Hunt sees profit, revenue rise in 4Q

Arkansas-based intermodal carrier sees growth in all divisions, aided by lower fuel prices, but offset by increased costs in hiring and retaining drivers.    The intermodal carrier J.B. Hunt on Thursday said its net income in the fourth quarter of 2014 rose 20 percent year-over-year to $110 million on revenue that increased 9 percent to $1.6 billion.
   For the year, J.B. Hunt’s revenue rose 10.4 percent to $6.2 billion. Operating income in the fourth quarter increased 19 percent to $182.9 million, and for the year grew 10 percent to $631.5 million.
   “The increase primarily reflects higher revenue in all business segments and the current benefit of rapidly falling fuel prices during the quarter,” minus the effect of lower fuel surcharge revenue, the carrier said. “These benefits were partially offset by increased costs paid to hire and retain drivers, higher workers’ compensation and accident costs, and higher costs of equipment ownership.”
   Profit growth in the fourth quarter was driven particularly by J.B. Hunt’s dedicated contract services, where operating income grew 25 percent year-over-year to $37 million. Intermodal operating income in the fourth quarter rose 6 percent, to $128.8 million.
   “There is some evidence of some core pricing power returning to the intermodal segment,” the investment bank Stifel said in a Thursday note on J.B. Hunt from its transportation and logistics group. “However, we think that challenging railroad service may be holding back the company’s ability to secure stronger price increases. Until service returns to the ‘truck-like’ levels shippers had grown to expect, it will likely be hard for the company to command any rate increases significantly above the rate of its cost inflation.”
   Stifel said J.B. Hunt’s balance sheet is in good shape, despite higher leverage and an increase in capital expenditures.