Hub Group Net Income Falls More Than 50% Even as Revenue Rises
Intermodal, trucking and logistics provider Hub Group had to wrestle with margin compression and acquisition-related expenses that caused second-quarter net income to plummet 53.8% even as revenue expanded by 8.1%.
The No. 8 company on the Transport Topics Top 100 list of for-hire carriers reported July 26 that it earned $9.54 million, or 29 cents per share, on quarterly revenue of $924.5 million. In the 2016 quarter the Oak Brook, Ill.-based company earned $20.7 million, 61 cents, on revenue of $855.6 million.
Bloomberg News reported the second-quarter consensus estimate for earnings was 38 cents per share.
Hub’s spending on purchased transportation for the quarter grew by 11.1% — or three percentage points more than revenue — to $823.2 million from $741.1 million.
The one-time charge for the quarter just ended was worth $4 million, or 7 cents per share, for severance and other expenses related to the July 1 acquisition of Estenson Logistics.
“Despite the current challenging market conditions, we remain committed to our strategy to increase market share by providing multimodal solutions to our clients,” Chairman and CEO David Yeager said in the earnings report.
“Our acquisition of Estenson provides Hub a strong foundation for growth in dedicated trucking. We continue to make strategic investments in our people and technology to strengthen our competitive position in the market,” Yeager added.
