J.B. Hunt misses on Q1 earnings

The Lowell, Ark.-based intermodal and trucking provider saw its profits climb 15 percent to $118.1 million as revenues and intermodal volumes increased 19.6 percent and 6 percent, respectively.    J.B. Hunt Transport Services Inc. grew its net earnings 15 percent year-over-year in the first quarter of 2018 to $118.1 million, according to the company’s most recent financial statements.
   The Lowell, Ark.-based intermodal and trucking provider reported earnings per diluted share of $1.07 for the quarter compared with $0.92 per share in first quarter 2017 as revenues rose 19.6 percent to $1.95 billion. Revenues surpassed the consensus analyst estimate $1.87 billion, but the growth still left the company just shy of the consensus EPS estimate of $1.09 per share.
   J.B. Hunt attributed the increase in profits primarily to volume growth in its intermodal segment, higher customer rates, new customer contracts and a “vibrant” spot rate market. These factors were offset in part by higher purchased transportation costs, lower intermodal network utilization, lower productivity in winter weather affected regions, increased wages and benefits, higher costs in its final-mile services network, higher equipment maintenance costs, increased technology spend on legacy system upgrades, branch network expansion costs, increased equipment ownership costs and increased insurance expenses.
   First-quarter earnings also benefited from $13.6 million ($0.12 per diluted share) in research and development tax credits and domestic production tax deductions incurred during the 2012 through 2016 tax years.
   J.B. Hunt’s intermodal division posted an operating income of $114 million for the quarter on $1.07 billion in revenues, increases of 20 percent and 14 percent, respectively, from the same 2017 period. JBI load volumes grew 6 percent and revenue per load rose 8 percent, as benefits from rate increases and freight mix were partially offset by increases in rail transportation costs, equipment ownership costs, driver wages and recruiting costs, and costs associated with the integration of container-tracking technology, as well as lower drayage efficiency caused by rail congestion, customer equipment pool utilization and a tight third-party dray market.
   Operating income in the company’s dedicated contract services segment, on the other hand, fell 9 percent year-over-year to $41 million despite revenues surging 26 percent to $494.5 million. A 5 percent increase in revenue per truck per week was not enough to offset inefficiencies stemming from harsh winter weather in areas of the Midwest and Northeast and increased insurance, wage, facilities and equipment maintenance costs.
   J.B. Hunt’s integrated capacity solutions segment saw first-quarter income jump 99 percent to $9 million on revenues that grew 41 percent to $296.1 million, as volumes and revenue per load increased 6 percent and 34 percent, respectively.
   And the company’s trucking division reported a 4 percent increase in operating income to $5 million despite a 1 percent dip in segment revenue to $92.7 million, as a 15 percent decrease in volumes offset a 14 percent increase in revenue per load (excluding fuel surcharge).