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Hub Group posted large first-quarter gains in profits and revenue, reflecting a strong freight market.
The Oak Brook, Ill.-based intermodal and logistics service provider’s net income rose 30.2% to $17.2 million, or 51 cents diluted earnings per share, from $13.2 million, 40 cents.
Revenue climbed 9.6% to $919.6 million from $838.9 million in the first quarter of 2020.
Hub’s operating income climbed 21.7% to $24.1 million from $19.8 million a year earlier.
“Strong freight market conditions, growth with our strategic customers, and our focus on providing a world-class customer experience resulted in 10% revenue growth in the quarter,” CEO Dave Yeager said in a May 5 news release.
The company’s intermodal revenue rose 6% to $506 million. A 2% increase in volume and a 4% increase in revenue per load fueled the quarter’s growth. But the results were offset by the impact of severe winter storms during the quarter, higher equipment repositioning expenses and the need to spend more on purchased transportation.
Hub logged $217 million in logistics revenue, an 8% increase. The segment was helped by growth in retail supplier solutions services and the addition of the recently acquired NonstopDelivery business. But that was partly offset by some lost customers, the company said.
Truck brokerage revenue grew 30% in the quarter to $127 million despite a 6% decline in volume. Hub said contracted freight made up 51% of total brokerage volume in the first quarter compared with 64% in 2020. It experienced growth in both contractual and transactional freight. But the results were partially offset by the impact of higher purchased transportation costs.
Hub’s dedicated freight segment’s revenue increased 11% compared to $69 million from the same period a year earlier. Growth came from both existing and new customers, it said.
The logistics company said it expects capital expenditures for the year to range from $165 million to $175 million as it purchases containers and tractors and makes technology investments. Hub plans to buy 3,000 containers, which will result in net growth of approximately 2,750 after scrapping older containers. It also plans to buy 700 tractors to replace older units in its drayage and dedicated freight fleets.
Hub projects that its 2021 diluted earnings per share will range from $3.20 to $3.40. It said revenue will grow in the midteen percentage range.
Hub Group ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 12 on the TT Top 50 list of largest logistics companies.
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