J.B. Hunt Earnings Rise; Rail Results Decline
Fourth-quarter trucking earnings reports kicked off with J.B. Hunt Transport Services Inc. posting 5.8% higher earnings of $116.7 million, or $1.01 per share, led by improved profits in its dedicated, over-the-road and brokerage businesses.
J.B. Hunt, which ranks No. 3 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, raised revenue less than 1% to $1.62 billion. In the 2014 quarter, net income was $110.3 million, or 93 cents per share, on revenue of $1.61 billion.
Meanwhile in the rail industry, Union Pacific Corp., based in Omaha, Nebraska, said fourth quarter earnings fell 22% to $1.12 billion, or $1.31 per share. Canadian Pacific Railway Ltd. net income fell 30% to C$319 million ($240 million), or C$2.08 per share. Executives at both companies cautioned that economic headwinds hurt results for the quarter.
Hunt’s trucking units improved revenue to $468.3 million from $459.3 million. Trucking profits were helped by private fleet conversions, improved productivity and higher rates. Profit before interest and taxes for dedicated and over-the-road freight was $52.4 million, a 16% increase from $45.1 million.
The statement cited “the addition of new customer accounts and rate increases implemented in the current and earlier periods” for improved dedicated business results. Over-the-road freight results improved due to “customer rate increases and an increase in fleet size.”
About 800 new trucks were added to the dedicated and over-the-road businesses, and their operating ratio improved to below 90.
In the brokerage sector, profit margins rose 2.3 percentage points to 16%, leading to a 40% increase in profits before interest and taxes of $12.8 million. The 4% brokerage revenue decline to $190 million was tied to lower fuel surcharges.
Allison Landry at Credit Suisse cited in a report multiple reasons for higher earnings.
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