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July 20, 2021 1:30 PM, EDT

J.B. Hunt Reports $2.91B Revenue for Q2

J.B. Hunt trucks J.B. Hunt Transport Inc.

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J.B. Hunt Transport Services Inc. reported gains in profit and revenue for the second quarter of 2021.

For the three months ending June 30, the Lowell, Ark.-based transportation and logistics company reported net earnings of $172.2 million, or $1.61 per diluted share, compared with $121.7 million, $1.14, during Q2 2020. Total operating revenue increased by 36% to $2.91 billion from $2.15 billion.

The results surpassed the forecasts of Wall Street analysts, who were expecting EPS of $1.55 per share on quarterly revenue of $2.72 billion, according to Zacks Consensus Estimate.

Roberts

Roberts

“The segments are all performing well and present solid evidence that support both our strategy to this point and what I believe to be strong momentum,” J.B. Hunt President John Roberts said during a July 19 conference call with investors after the results were released. “Given the work we have completed with our customers, current demand trends, order flows and sales pipelines, coupled with the data revealing some of the lowest inventory levels we have seen, give us confidence in this momentum continuing.”

Revenue in Q2 for the company’s truckload segment increased 70% to $184 million compared with $108.3 million a year ago, lifted by a 40% increase in revenue per loaded mile and a 13% increase in the average length of haul. Operating income for the segment soared to $14.2 million compared with $3.5 million in Q2 2020. The gain was attributed to increased load counts and revenue per load that were partially offset by increases in purchased transportation expenses and higher compensation expenses for nondriving personnel.

Revenue in the intermodal segment increased 21% to $1.29 billion compared with $1.07 billion last year, as load volumes rose 6% over the same period in 2020. Operating income increased 26% to $134.6 million from $107 million during the prior-year quarter.

“Customer demand has been very strong and velocity has been the bottleneck,” added Darren Field, president of intermodal at J.B. Hunt. “We highlighted that we have new containers on the water today. We have strong confidence in our ability to receive between 3,000 and 4,000 during the third quarter.”

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The Final Mile Services segment saw Q2 revenue rise 52% to $212 million compared with $139.6 million last year, primarily from the addition of new customer contracts. The year-ago period also included temporary suspension of operations at several customer sites because of the pandemic. Operating income in the segment swung to a $10.7 million profit from an operating loss of $5.2 million, driven primarily by higher volumes compared with year-ago levels and a $3.2 million benefit from a net settlement of claims. These factors were partially offset by higher personnel compensation expenses.

The company’s Integrated Capacity Solutions segment saw revenue nearly double to $607 million from $304.3 million last year as truckload volumes increased 30% over the prior year while revenue per load increased 66%. Revenue per load was favorably impacted by changes in the customer freight mix and higher contractual and spot rates, Hunt said. Operating income for the segment rebounded to $3.1 million compared with an operating loss of $13.1 million in Q2 2020, primarily from higher gross profit margins and increased scale with the J.B. Hunt 360 load board service. These gains were partially offset by higher personnel and technology costs.

The company’s Dedicated Contract Services segment reported that Q2 revenue rose 17% to $621 million compared with $533.2 million last year, driven by an 11% improvement in revenue per truck per week compared with the prior-year quarter. However, operating income fell 5% to $79 million from $83.1 million last year amid increases in driver wage and recruiting costs, nondriver personnel salary, wages and incentive compensation, higher group medical expense and elevated costs related to the implementation of long-term contracts.

While noting that Hunt outpaced Wall Street expectations, Cowen and Co. analyst Jason Seidl pointed out that cost pressures it faced in Q2 tied to compensation and purchased transportation costs put a strain on results.

“JBHT reported a quarter slightly above expectations, driven by a strong demand backdrop, partially offset by cost headwinds primarily associated with labor shortages across the supply chain,” Seidl wrote in a July 20 report. “Challenges management cited were in line with our 2Q carrier survey, which we believe will be a major theme amongst our coverage over the next several weeks.”

J.B. Hunt Transport Services Inc. ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and ranks No. 5 on the TT Top 50 logistics companies list.

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