J.B. Hunt Q3 Profit Beats Expectations, Boosts Share Price
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Profit at J.B. Hunt Transport Services fell in the third quarter of 2024 but outperformed analyst expectations as intermodal volume rose year over year.
The Lowell, Ark.-based carrier posted a Q3 profit of $152.1 million, or diluted earnings per share of $1.49, down 18.8% compared with $187.4 million, $1.80, in the year-ago period, it said after the market closed Oct. 15.
The company’s share price rose around 5% in the first hour of trading Oct. 16 as the earnings beat consensus EPS and revenue expectations.
Analysts expected EPS of $1.42 per share and revenue to total $3.01 billion, according to Zacks Equity Research. The company has topped consensus revenue estimates twice in the past four quarters, the research house added.
Revenue in the most recent quarter totaled $3.07 billion, a decrease of 3% compared with $3.16 billion in Q3 2023.
J.B. Hunt said the decline in revenue was primarily due to a 5% and 6% decrease in gross revenue per load at its Intermodal (JBI) and Truckload (JBT) units, respectively; declines in load volume of 10% and 6% at the company’s Integrated Capacity Solutions and Dedicated Contract Services (DCS) unit, respectively; and 6% fewer stops for its Final Mile operations.
“We continue to navigate a challenging freight environment while remaining focused on what we can control around our costs, providing exceptional service to our customers, preparing for their future transportation needs, and maintaining our focus on safety,” CEO Shelley Simpson said during an Oct. 15 analyst conference call after the market closed.
“As discussed last quarter, we have seen a return to more normal seasonal demand patterns as evidenced across our businesses in the third quarter,” she added.
J.B. Hunt ranks No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, No. 2 on the truckload/dedicated list and No. 1 in the intermodal/drayage market segment. It also ranked No. 3 on the TT Top 100 logistics companies list.
The company’s JBI unit saw flat Q3 revenues at $1.56 billion. Volume increased 5% year over year to 547,988 from 521,221.
“Overall, we saw the momentum from the second quarter accelerate into the third quarter as our overall volume was up 5% year over year, which modestly outperformed normal seasonality,” President of Intermodal Darren Field told analysts.
“Volume growth during the third quarter was driven by 7% growth in [the company’s Transcontinental network,] with Southern California outbound volumes up double digits once again this quarter and 3% growth in the East. By month, our consolidated volumes were up 7% in July, up 4% in August, and up 4% in September,” Field said.
“In the East, we continue to compete more directly with one-way truckload, but as evidenced by our overall volume improvement this quarter, we are beginning to win back small amounts of freight from customers due to our strong service levels and ability to meet their capacity needs,” he added.
Meanwhile, the company’s DCS unit posted Q3 revenue of $846 million, a 5% decrease compared with $892.3 million a year earlier.
The unit had 498 fewer revenue-producing trucks in the fleet at the end of Q3 compared with 13,259 a year earlier, and 128 less than at the end of the second quarter of 2024.
“While we have discussed some pressure on the fleet size due to customer downsizing bankruptcies and as a result are remaining disciplined on our underwriting return hurdles, we believe the market remained stable with ample opportunities for future growth,” Chief Operating Officer Nicholas Hobbs said during the call.
“During the third quarter, we sold 258 trucks of new deals, which some we expect to sign in Q3 spilling over into [the fourth quarter] due to the timing,” Hobbs said. “Our sales pipeline remains strong, and our team has worked hard to backfill most of those truck losses we have experienced this year.“
“We have started up a significant number of customer locations and trucks over the past two quarters, which has had an impact on our margin as mature business has been replaced by newer, less mature business,” he added.
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For the company’s JBT truckload operations, revenue fell 12% year over year to $173 million in the most recent three-month period.
The unit “experienced modestly improving volume trends and some pockets of tightness across the country, which would or should be expected around a month end and quarter end,” Executive Vice President of Sales and Marketing Spencer Frazier told analysts.
“While, in general, capacity remains readily available in the market on the highway side of the business, some customers are beginning to use more many bids to fill some out-of-cycle capacity needs,” Frazier said.
“There is interest in adding more collaborative, long-term planning discussions around business strategies. Historically, both of these engagements have been indicative that supply and demand are becoming more in balance,” he noted optimistically.
