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J.B. Hunt blows past Q4 expectations

Revenue up in every division again

Intermodal segment margins improve as pricing steps higher (Photo: Jim Allen/FreightWaves)

J.B. Hunt Transport Services handily beat fourth-quarter estimates Tuesday after the market closed, posting earnings per share of $2.28, well ahead of the $2.02 consensus estimate.

The Lowell, Arkansas-based company reported year-over-year revenue growth across all of its segments, 28% higher on a consolidated basis at $3.5 billion, with increased freight rates outpacing incremental costs associated with operating in an overwhelmed supply chain. J.B. Hunt (NASDAQ: JBHT) posted a 90.8% operating ratio in the period, 160 basis points better year-over-year.

Click for full article – “All J.B. Hunt segments log growth for better-than-expected Q4”

Revenue in the company’s largest segment, intermodal, increased 26% year-over-year to $1.57 billion as revenue per load increased 30% and total loads came in only 3% lower. By comparison, total intermodal traffic on the U.S. Class I rails was down 9% year-over-year in the fourth quarter. There was a 500-bp positive spread between revenue per load and cost per load, which led to an 87.6% OR, 350 bps better year-over-year.

“While demand for intermodal capacity remains strong, ongoing network fluidity challenges driven by rail restrictions and customer detention of equipment, were even further impacted by weather, derailments and COVID-related labor shortages and disruptions during the quarter,” a press release read.

The dedicated segment reported $712 million in revenue, 25% higher year-over-year, as average trucks in use increased 16% and revenue per truck per week was up 7%.

“Lower productivity on startup accounts and a greater number of open trucks due to the tight labor market and COVID-related labor disruptions” were headwinds. Also, a host of incremental costs, including casualty insurance expense, bonuses and pay increases, and contractual startup costs weighed on margins. The division posted an 89.8% OR, 340 bps worse year-over-year.

A 27% increase in revenue per load moved brokerage profitability nearly four times higher year-over-year at $21 million.

The truckload division leveraged additional drop-trailer capacity to a 15% load count increase. Revenue per loaded mile was up 36%, 32% higher excluding fuel surcharges. Even with higher purchased transportation costs in the quarter, the division recorded 400 bps of OR improvement at 90%.

Final-mile operating income fell 68% excluding a $5.7 million reduction in contingent liability. Stop counts were down 22% due to labor shortages at customer accounts as well as supply chain congestion. Also, startup costs associated with new contracts weighed on the period. The benefit from the reduction contributed approximately 4 cents in EPS.

The company will host a call at 5 p.m. EST Tuesday to discuss results with analysts. Stay tuned to FreightWaves for continuing coverage of J.B. Hunt’s earnings announcement.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes J.B. Hunt (No. 4).

Click for full article – “All J.B. Hunt segments log growth for better-than-expected Q4”

Table: J.B. Hunt’s key performance indicators

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Watch: Carrier Update – January 18 2022

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.