J.B. Hunt Reports $3.84 Billion in Revenue for Q3

Numbers Beat Wall Street Expectations
J.B. Hunt A J.B. Hunt truck. (John Sommers II for Transport Topics)

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J.B. Hunt Transport Services Inc. saw revenue and earnings increase as a result of strong segment growth during the third quarter, the company reported Oct. 18, besting analysts’ expectations.

The Lowell, Ark.-based transportation and logistics company posted net earnings of $269.4 million, or $2.57 a diluted share, for the three months ending Sept. 30. That compared with $199.8 million, $1.88, during the same time the previous year.

Revenue increased by 22% to $3.84 billion from $3.14 billion.



 

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“I’d like to start by saying how humbled and excited I am to be stepping into this new role,” Shelley Simpson said during her first quarterly earnings call as company president. “Over the years you’ve heard me talk about various areas of the business that I have had the honor to lead. I approached this new position with the same passion for our people.”

The results were above expectations by investment analysts on Wall Street, which had been looking for $2.45 per share and quarterly revenue of $3.8 billion, according to Zacks Consensus Estimate.

“We recognize unique and significant opportunities in the marketplace,” Simpson said. “We will remain committed to disciplined investments in our company foundation, which I spoke to last quarter. That is our people you trust, technology that empowers and capacity to deliver. When we make the right investments in the right people, give them the proper tools to equip and empower them and deliver value and exceptional service to our customers, all of our stakeholders should reap the benefits.”

The truckload segment reported that revenue for the third quarter increased 34% to $273.6 million from $203.6 million last year. This was primarily due to increased load volume and higher revenue per load. The segment volumes were up 13% year-over-year as average total trailer count increased by approximately 3,800 units.

The operating income for the truckload segment increased 30% to $19 million from $14.7 million. This was driven by higher volume and revenue that were partially offset by higher truck purchased transportation expense, equipment-related and maintenance expense, investments in personnel, insurance expenses and technology-related investments.

The Final Mile Services segment reported that revenue increased 21% to $249.4 million from $205.9 million. This was primarily driven by the previously announced acquisition of Zenith Freight Lines and multiple new customer contracts, partially offset by internal efforts to improve revenue quality of the business.

Simpson

Simpson

The FMS segment saw operating income soar 652% to $9.61 million from $1.28 million. This was primarily driven by an improvement in revenue quality and partially offset by increases in investments to attract and retain professional driver and nondriver personnel, higher equipment-related and maintenance costs and increased insurance costs.

The intermodal segment reported that revenue grew 30% to $1.84 billion from $1.41 billion. J.B. Hunt continued to experience growth in demand for intermodal services. But volume was negatively impacted by rail velocity challenges, customer detention of equipment and overall supply chain uncertainties.

The operating income for the intermodal segment increased 31% to $217 million from $165.1 million. This was primarily from higher customer rate and cost recovery efforts and volume. These items were partially offset by higher rail purchased transportation expenses, labor recruitment investments and higher equipment-related expenses.

The Dedicated Contract Services segment reported that revenue increased 34% to $894 million from $664.8 million. This was primarily due to a year-over-year increase in average revenue producing trucks and an increase in productivity.

The DCS segment also reported operating income increased 32% to $103.1 million from $78.1 million. This was primarily from new business onboarded over the past year as well as greater productivity and utilization of equipment. These items were partially offset by costs to attract and retain workers and higher equipment-related expenses.

The Integrated Capacity Solutions segment reported that revenue decreased 11% to $591 million. This was due to a decrease in overall segment and truckloads during the quarter. Higher contractual rates in the truckload business and changes in customer freight mix were more than offset by lower revenue per load in the transactional business. The ICS operating income decreased 8% to $13.5 million.

The J.B. Hunt 360 Marketplace helped drive these segment results. Total freight transactions in the marketplace increased 7% to $552 million from $519 million last year. The truckload and intermodal segments executed approximately $123 million and $38 million of their costs through the platform.

“JBHT kicked off 3Q earnings with a top- and bottom-line beat on strong intermodal pricing and share buybacks,” Cowen and Co. analyst Jason Seidl wrote in a report. “While improving network fluidity will support volumes in 4Q, macro cracks are apparent. Pricing growth will normalize as congestion eases and TL spot rates drop though robust bid compliance will prevent a steep decline.”

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. It also ranks No. 5 on the TT list of the 100 largest logistics companies in North America.

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