Multimodal transportation provider J.B. Hunt Transport Services handily beat second-quarter forecasts on Wednesday after the market closed, sending shares 8.6% higher in after-hours trading.
Revenue of $3.5 billion was 19% higher year over year and outpaced analysts’ expectations for $3.26 billion. Earnings per share of $1.91 were 60 cents higher y/y and 18 cents ahead of consensus. (A lower tax rate and lower interest expense were each 4-cent tailwinds in the quarter.)
Operating income of $259 million (plus-32% y/y) was driven by higher revenue and recent cost reductions.
J.B. Hunt’s (NASDAQ: JBHT) intermodal revenue increased 22% y/y to $1.75 billion as loads were up 10% and revenue per load was 11% higher. Transcontinental volumes were up 5% y/y, with volumes in the East up 16% y/y. By comparison, total intermodal carloads were up 8% y/y on the U.S. Class I railroads in the quarter (North American containers were up 5% y/y).
The increase in revenue per load was largely due to higher fuel surcharges. Excluding fuel, yields were 1% higher y/y in the period. Yields are being weighed down by the mix shift to the East, where lengths of haul are shorter (length of haul was down 3% y/y).
The unit booked a 91.4% operating ratio (8.6% operating margin), 190 basis points better y/y.
Dedicated revenue increased 9% y/y to $921 million. The increase was entirely attributable to an increase in revenue per truck per week (due to higher fuel surcharges). Revenue per truck per week was 2% higher excluding fuel surcharges. An 88.9% OR was flat y/y.
The company’s brokerage business turned an operating profit for the first time in 14 quarters. Revenue was up 49% y/y as loads increased 19% and revenue per load increased 26%. A 12.5% gross margin was 300 bps lower y/y due to elevated purchased transportation costs (54% higher y/y).
The asset-light truckload business recorded a $1.3 million operating loss in the quarter due to elevated purchased transportation costs.
J.B. Hunt will host a call at 5 p.m. EDT on Wednesday to discuss second-quarter results.
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