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October 16, 2020 12:00 PM, EDT

J.B. Hunt Reports Year-Over-Year Rise in Q3 Earnings, Revenue

J.B. Hunt trucksOperating income totaled $175.5 million compared with $167.9 million for the third quarter of 2019. (J.B. Hunt Transport Inc.)

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J.B. Hunt Transport Services posted increased earnings and revenue in the third quarter year-over-year, the carrier announced Oct. 16.

The Lowell, Ark.-based transportation and logistics company posted net income of $125.5 million, or $1.18 a diluted share, for the three months ending Sept. 30. That marks a 7% increase from $118.4 million, or $1.10 a share, during the same 2019 period.

Total operating revenue increased by 4.6% to $2.47 billion from $2.36 billion the prior year.

 

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Based on Wall Street analysts’ projections, the results were mixed as they were looking for $1.22 per share and quarterly revenue of $2.35 billion, according to Zacks Consensus Estimate.

Operating income totaled $175.5 million compared with $167.9 million for the third quarter of 2019. The previous year’s operating income, however, included $44.2 million in pre-tax charges related to the final award in the arbitration with BNSF Railway Co.

J.B. Hunt Transport Services CEO John Roberts

Roberts

“We are all learning to live with the changes that have been presented by the virus,” J.B. Hunt CEO John Roberts said during a conference call with investors Oct. 16. “The third quarter showed us some new opportunities and spiking customer demands across all businesses that I don’t recall seeing in the past. At different points, we regrettably had to turn away business.”

The report stated that the revenue performance primarily was driven by a 25% increase in revenue per load in Integrated Capacity Solutions (ICS), a 34% rise in the number of stops in the final-mile segment, a 9% increase in loads for dedicated and a 14% hike in loads in the truckload segment.

ICS revenue increased 28% during the quarter to $431 million compared with the same time last year. Volumes and revenue per load increased due to customer freight mix changes and higher contractual and spot rates. The J.B. Hunt 360 marketplace helped drive segment revenue by adding $291 million. Operating income worsened over the year to a loss of $18.3 million.

The intermodal segment reported that revenue declined by 2% to $1.21 billion. The decrease reflected a 5% drop in revenue per load, which partially was offset by 2% load growth. Volumes were heavily constrained by rail congestion and service issues stemming from increased demand and intermittent labor challenges in the rail and truck networks.

Operating income for the segment increased by 22% over the year to $108.4 million. But the prior-year third quarter did include the BNSF arbitration.

Dedicated Contract Services (DCS) reported that revenue increased 1% to $553 million compared with the prior-year quarter. Productivity was flat versus the 2019 period. There was a net additional 63 revenue-producing trucks this quarter compared with last year. Operating income increased 5% over the prior-year quarter to $80.4 million.

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Final Miles Services (FMS) reported that revenue increased 22% over the year to $182 million. Stop count within the segment increased 34% during the current quarter compared with the prior year. This primarily was driven by a December 2019 acquisition and the addition of multiple customer contracts implemented throughout 2020. Operating income increased 13% to $2.1 million over the year.

Truckload reported revenue increased by 16% year-over-year to $109 million. This primarily was driven by a 14% increase in load count and a 5% rise in revenue per load compared with the prior-year quarter. Operating income for the segment decreased 55% to $2.9 million compared with the prior year.

Stephens Inc. noted in a report that earnings per share missed consensus estimates and its own projection of $1.27. The investment banking company found the shortfall was driven by operating margins as revenue being beat by 5%.

“Looking at segment results relative to our model, the most significant difference came from Intermodal, that was a [10-cent, earnings-per-share] miss from weaker-than-expected margins,” Stephens analyst Justin Long said in the report. “We think this is likely from costs related to congestion and repositioning in the quarter, which was a well-known headwind.”

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. 4 on the Transport Topics Top 50 list of the largest logistics companies in North America.

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