Hub Group Q4 Profit Falls Despite Intermodal Volume Growth
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Fourth-quarter and full-year profit and revenue at Hub Group fell as lower revenue per load outweighed increased intermodal volume amid an ongoing weak freight market, the company said.
However, quarterly results matched analyst prognostications, and company executives expressed optimism about the prospects for 2025 after a January that surpassed expectations.
Hub Group posted fourth-quarter 2024 net income of $24.37 million, or 40 cents per share, a decrease of 18.2% compared with $29.79 million, 46 cents, in the year-ago period, the Oak Brook, Ill.-based company said after the markets closed Feb. 6. Hub’s revenue for the most recent quarter totaled $973.5 million, a 1% decline from $985 million in Q4 2023.
The company’s full-year 2024 profit came in at $104 million, $1.70, down 37.9% compared with $167.53 million, $2.62, in 2023. The company’s full-year revenue slid to $3.9 billion from $4.2 billion a year ago, it said.
For the quarter, strong intermodal volume, surcharge revenue and final-mile growth was offset by lower brokerage, consolidation and fulfillment and managed transportation revenue, the company said.
The company ranks No. 14 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 2 among intermodal/drayage carriers. It also ranks No. 18 on the TT Top 100 logistics companies list.
Hub’s Intermodal and Transportation Solutions division reported revenue of $570.4 million, a 1% decline compared with $576.5 million in the year-ago period.
The unit’s performance was underpinned by intermodal volume growth of 14% and surcharge revenue, but this only partially offset lower revenue per load revenue. Hub did not provide specific volume or revenue-per-load figures.
“In intermodal, we had strong peak season shipping demand driven by seasonal inventory builds and diversions from the East Coast ports to ensure supply chain fluidity,” CEO Phil Yeager told analysts during the company’s Q4 earnings call, pointing to last year’s trend of companies diverting shipments to West Coast ports as a result of threatened port strikes along the East and Gulf coasts.
Hub Group Q4 2024 Earnings Report
“We have continued to see pretty strong demand on the West Coast,” Yeager said. “Just to give you kind of month by month, October volumes were up 13%. November was up 13%. December was up 16%. But January, on a year-over-year basis, we’re up 18%. So our volumes continue to be quite strong. I think you will see some pull forward just to ensure fluidity of the supply chain.”
However, he cautioned, “None of our customers at this point are making any huge changes; they’re just monitoring the situation closely just like we are.”
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The company’s Logistics division posted revenue of $429 million in Q4, a 2% decline from $437.86 million a year ago, as growth in final-mile revenue only partially offset lower brokerage, consolidation and fulfillment and managed transportation revenue. “The last year was one that remained challenging, with excess capacity and balanced demand,” Yeager told analysts.
Company leaders are optimistic heading into 2025.
“To begin the year, we are seeing improvements in demand due to weather events, and increased emphasis from our customers on shipment security and small carrier exits,” Yeager said.
Hub Chief Financial Officer Kevin Beth said, “March is always a big swing factor in Q1, and so we’ll have more to talk about as we enter that time frame.”
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Yeager noted that 2025 is poised for a settling down, as carrier capacity continues to exit the industry, consumer demand remains resilient, and inventories become more balanced. “These trends and the actions we have taken to improve our cost structure, maintain excellent service levels, and improve growth across all of our offerings, we believe will lead to improved revenue and earnings in 2025,” he said.
Beth added, “Pricing in the first half of the year is expected to be comparable to Q4 rates with increases materializing in the second half of the year, as we reprice contracts as part of the annual bid cycle.”
A leading indicator of that rate improvement is customers that are pulling forward bids to try to lock in lower rates, said Yeager.
Customers are also hurrying up their activity to minimize risks from any cross-border tariffs imposed by the Trump administration, he said. President Donald Trump has paused into March his threat to impose 25% tariffs on U.S. imports from both Canada and Mexico.
