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December 28, 2017 10:15 AM, EST

J.B. Hunt Estimates 4Q Revenue Will Grow More Than 10%

But Investors Warned Profits Will Decline on One-Time Charges
J.B. Hunt truck Luke Sharrett/Bloomberg News

J.B. Hunt Transport Services Inc. offered investors and analysts some estimates on revenue and income for the fourth quarter. The carrier formally releases its financial statements Jan. 18.

The Lowell, Ark.-based company predicted earnings between $85 million and $90 million or about 70 cents to 82 cents per share. It would represent a decline of 20-30% versus the final three months of 2016, when J.B. Hunt generated $117.6 million in profits or $1.05 per share.

However, within the disappointing estimates were one-time charges consisting of a $20.3 million reserve fund tied to the delayed delivery of trailers the carrier already paid for with a cash advance and $18.6 million to cover higher insurance and claims costs. The $38.9 million total equals the loss of about 21 cents per share.

“We don’t think there will be any major surprises in segment performance when the company officially reports fourth-quarter results on Jan. 18. And while investors are clearly looking at how strong 2018 could be for Hunt and the group more broadly, especially in light of lower corporate tax rates, this morning’s slightly disappointing pre-announcement could potentially result in a questioning of just how much near-term upside is left in the group,” Cowen & Co. analyst Jason Seidl wrote in a note to investors.

The picture on the top line looks much more favorable to J.B. Hunt, which ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

The company forecast revenue will end up $1.9 billion to $2 billion, a 10-16% year-over-year gain from $1.72 billion in 2016.

J.B. Hunt also informed investors that still is evaluating how the tax overhaul signed into law will affect its income statements, balance sheet and cash flow statements.