Net Income Drops 5% at J.B. Hunt in Third Quarter
J.B. Hunt Transport Services Inc., the first trucking company to report third-quarter earnings, said net income declined 5% to $109.4 million, or 97 cents, dragged down by weaker profit margins in all of its businesses except dedicated trucking.
Revenue rose 7% to $1.69 billion. Third quarter 2015 earnings were $115.1 million, or 99 cents. The results trailed the average Bloomberg News forecast of $1.02, based on an analyst survey.
The company said lower rates for brokerage, intermodal and its trucking unit joined with “tepid customer demand” to outweigh factors such as 7% more intermodal freight shipments handled.
At the intermodal unit, results showed profit before interest and taxes fell 7% despite a 2% rise in revenue to $969.6 million because revenue per load slipped 4.2%.
“Benefits from improved volumes, improved operating efficiencies from network balance and reduced reliance on third party dray carriers were offset by lower customer rates, increases in rail purchased transportation rates, equipment costs including lower box utilization, increased insurance and claims costs and increased costs to attract and retain drivers,” the company’s statement said.
Dedicated trucking performed better, posting 16% higher profit on the same basis of $52.4 million on 6% revenue growth.
Dedicated was helped by a higher truck count and improved productivity that outpaced higher driver-related costs.
Brokerage revenue rose 35% to $233 million, including an 88% rise in shipments arranged and revenue per load that fell nearly 30%. The drop in revenue per load was tied to factors such as lower rates and reduced fuel surcharges. The profit margin per load nosedived to 12.8% from 15.9%.
The over-the-road trucking unit, smallest of the company that ranks No. 4 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, delivered 55% lower profit before interest and taxes while revenue was little change at $97 million.
