J.B. Hunt’s Q3 Profits Exceed Expectations, Shares Rise
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**Intermodal Volumes Up 5%, but Simpson Says Market Remains Challenging**
J.B. Hunt Transport Services reported a decline in profits for the third quarter of 2024, but intermodal volumes grew year-over-year, outperforming analyst expectations.
The transportation company based in Lowell, Arkansas, announced after market close on October 15 that its net income for Q3 was $152.1 million, or $1.49 per diluted share, compared to $187.4 million and $1.80 per share in the same period last year, marking an 18.8% decrease.
The company’s shares rose about 5% during the first hour of trading on October 16 as earnings surpassed expectations for both EPS and revenue.
According to Zacks Equity Research, analysts had expected earnings per share of $1.42 and total revenue of $3 billion. The company exceeded consensus revenue estimates in two out of the last four quarters.
Total revenue for the quarter was $307 million, a 3% decrease from $316 million in Q3 2023.
J.B. Hunt attributed the decline in revenue to decreases in gross revenue per load for its Intermodal (JBI) and Truckload (JBT) segments by 5% and 6%, respectively; a drop of 10% and 6% in loads from its Integrated Capacity Solutions and Dedicated Contract Services (DCS) divisions; and a 6% decrease in the number of stops for its final-mile operations.
CEO Shelley Simpson said during an analyst call after market close on October 15, “We continue to navigate through a challenging freight environment while focusing on costs we can control, delivering exceptional service to our customers, preparing them for their future transportation needs, and maintaining our focus on safety.”
She added, “As discussed last quarter, we are seeing more normal seasonal demand patterns reflected in our Q3 business.”
J.B. Hunt ranks third among North America’s largest leased operating trucking companies, second in the Truckload/Dedicated Logistics category, and first in the Intermodal/Barge segment. It also holds the third position on TT Top 100 logistics providers list.
The company’s JBI division reported flat revenue of $1.56 billion for Q3. Volumes grew year-over-year by 5%, reaching 547,988 from 521,221 last year.
Intermodal President Darren Field said during the analyst call, “Overall, we saw momentum accelerate into Q3 from Q2 as our total volume increased 5% year-over-year, slightly above normal seasonal levels.”
Field noted, “Q3 volumes were driven by a 7% growth in our cross-country network, with double-digit growth again in Southern California shipments this quarter and a 3% increase in the East. On a monthly basis, we saw combined volume increases of 7% in July, 4% in August, and 4% in September.”
He added, “In the East, we continue to compete more directly with one-way truckload, but as shown by overall volume improvements this quarter, we are starting to win back some business from customers due to our strong service capabilities and ability to meet their capacity needs.”
Meanwhile, Q3 revenue for the company’s DCS division was $846 million, a 5% decrease from $892.3 million in the same period last year.
As of the end of Q3, the number of profitable trucks in the fleet was down by 498 units compared to 13,259 at this time last year and decreased by 128 units since the end of Q2 2024.
COO Nicholas Hobbs said during the call, “While we’ve discussed some pressure on fleet size due to customer bankruptcies and therefore maintaining strict underwriting return thresholds, we believe the market remains stable with ample opportunities for future growth.”
Hobbs added, “During Q3, we sold 258 new truck transactions, some of which are expected to be signed in Q4 due to timing. Our sales pipeline remains strong as our team has worked hard to fill much of this year’s truck losses.”
“In the last two quarters, we’ve launched a significant number of customer locations and trucks, impacting margins as mature businesses have been replaced by newer, less mature ones,” he added.
Regarding JBT Truckload operations, revenue for the latest quarter was down 12% at $173 million compared to the same period last year.
Executive Vice President of Sales & Marketing Spencer Frazier told analysts that the division “experienced slightly improved volume trends and some tightness in certain areas across the country, as expected towards month-end and quarter-end.”
Frazier noted, “While overall highway capacity remains ample, some customers are starting to use more bidding to meet out-of-cycle capacity needs.”
He optimistically pointed out, “There is growing interest in adding more collaboration and long-term planning discussions into our commercial strategies. Historically, these have indicated signs of a more balanced supply-demand relationship.”
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Source: Transport Topics
