Hub Group reported record revenue and higher profits in the fourth quarter and full year in 2017 as the nation’s largest intermodal marketing company continues to grow its logistics and trucking operations.
Hub Group, based in Oak Brook, Ill., said revenue hit $1.16 billion in the three months ended Dec. 31, compared with $978.6 million in the same period a year ago.
For the full year, revenue topped $4 billion in 2017, up from $3.57 billion in 2016, bolstered in part by the acquisition of Estenson Logistics in July and strong gains in truck brokerage and logistics services.
Operating income rose to $41.1 million in the fourth quarter of 2017 from $30.8 million in the same period in 2016. For the year, Hub earned $34.4 million in 2017 versus $24.3 million in 2016.
Net income after taxes surged to $99.9 million, $3.01 a share, in the fourth quarter of 2017, compared with $18.2 million, or 55 cents, a year ago. The results include a one-time tax benefit of $75.2 million, or $2.25 a share, reflecting a write down of future tax liabilities due to passage of the Tax Cuts and Jobs Act.
Hub Group’s intermodal revenue grew 8% to $502.7 million in the fourth quarter of 2017 and reflected a 2% increase in volume and higher fuel surcharge revenue and freight rates. The results also include revenue of $57.8 million from the former Estenson business, which now operates under the name Hub Group Dedicated.
Truck brokerage revenue increased 22% to $159.1 million in the quarter with 2% more loads and higher gross margins primarily because of growth with strategic customers.
Unyson Logistics, the company’s transportation management business unit, saw revenue increase 19% to $185.4 million, but gross margins declined due to what officials said was an “unfavorable customer mix.”
“Our goal is to continue to provide innovative, value-added multimodal solutions by offering reliability, visibility and value to our customers,” said Dave Yeager, CEO of Hub Group. “We will continue to invest in our people, equipment and technology to work towards this goal, while improving productivity and margins.”
Yeager said the company is on track to achieve its target of $6 billion in revenue in the next five years.
“We intend to achieve $6 billion in revenue through organic growth initiatives and acquisitions in both our core business and new service offerings,” he said.