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Revenue increased but profit fell at Hub Group in the fourth quarter as it took charges to increase insurance claim reserves and to close an office.
The Oak Brook, Ill.-based intermodal and logistics service provider’s net income dropped 19.9% to $22.4 million from $28 million in the same period a year earlier. Diluted earnings per share fell to 67 cents from 84 cents.
Revenue climbed 5.8% to $952.7 million compared with $900.1 million for the fourth quarter of 2019.
Hub’s operating income shrank 19.8% to $31.2 million compared with $38.9 million a year earlier.
A strong freight market contributed to the revenue increase, CEO Dave Yeager said in a Feb.4 news release.
For the year, Hub Group’s net income fell 31.4% to $73.6 million from $107.2 million in 2019. Operating income decreased 30.6% to $105.8 million from $152.4 million. Revenue slid 4.7% to $3.5 billion from $3.7 billion.
The company made several large investments during the quarter, including spending $90 million on the cash acquisition of NonstopDelivery, a last-mile logistics provider that gives Hub the ability to deliver to all U.S. ZIP codes.
“We anticipate significant cross-sell opportunities with our customer base,” Yeager said.
Hub Group’s fourth-quarter capital expenditures totaled $60 million, primarily to fund the purchase of containers and tractors and to make technology investments. The company ended the year with $125 million in cash.
Hub Group’s financial performance was mixed during the latest quarter.
Revenue for the logistics business segment declined 1% to $182 million as growth in its CaseStack retail supplier freight business and the acquisition of NSD in December did not fully offset the loss of customers.
Truck brokerage revenue grew 27% in the quarter to $126 million even with an 8% decline in volume, the company said. Contract business fell to 64% of the business segment’s revenue compared with 78% in the same period a year earlier. Higher margin spot freight contributed to the revenue gain.
Dedicated shipping revenue decreased 3% to $68 million compared with the prior year. Hub Group attributed the decline to exiting several business relationships
Hub Group ranks No. 12 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 36 on the TT Top 50 list of largest logistics companies.
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