J.B. Hunt Raises First-Quarter Net Income 6.4%

J.B. Hunt Transport Services Inc., the first trucking company to report earnings for the first quarter, improved net income 6.4% to $100.1 million, or 88 cents per share, helped by stronger results at its dedicated and brokerage units.

Lowell, Arkansas-based J.B. Hunt raised revenue 6% to $1.53 billion from $1.44 billion, a company statement said. First-quarter 2015 net income was $91.9 million, or 78 cents.

The brokerage unit recorded the highest growth in profit before interest and taxes, climbing more than 60% to $10.8 million from $6.6 million. Profit on that basis rose 25% at the dedicated unit to $44.8 million, and 8% at the truck unit to $9.2 million.

Truck/rail profit at Hunt’s largest unit before interest and taxes slipped 1% to $103.1 million, but revenue was 2% higher at $895 million. Brokerage revenue rose 12% to $183 million, while dedicated revenue gained 4% to at $358 million. Truck unit revenue increased 5% to $96 million.

“J.B. Hunt benefitted from volume growth, improved network operations, higher equipment utilization, lower equipment maintenance costs and increases in contract pricing,” said a report from Allison Landry at Credit Suisse. “These benefits were partially offset by increased rail purchased transportation costs, higher driver wages and recruiting costs, increased costs of equipment ownership and corporatewide technology upgrades.

Truck/rail shipments rose 12%, twice as fast as the fourth quarter of last year. The increase was split nearly evenly between transcontinental and Eastern network freight. Brokerage profit margins improved 3.6 percentage points to 17.3%. Dedicated results were helped by improved productivity and private fleet conversions, the statement said.

The statement said its full-year profit growth projections of about 10% remain in place, though “customer freight demand is expected to be closely aligned with the current and unpredictable nature of the overall United States economy.”

Earnings per share at the company, ranked No. 3 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, was 3 cents higher than the average estimate compiled by Bloomberg News based on an analyst survey.