J.B. Hunt Reports $2.9 Billion Revenue for Q1
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J.B. Hunt Transport Services Inc. experienced a decline in revenue and earnings during the first quarter of 2024, the company reported April 16.
The Lowell, Ark.-based transportation and logistics company posted net income of $127.5 million, or $1.22 a diluted share, for the three months ending March 31. That compared with $197.8 million, $1.89, during the same time the previous year. Total operating revenue decreased 9% to $2.94 billion from $3.23 billion.
“The current environment we’re in has remained persistently challenging, and for longer than we had predicted,” J.B. Hunt CEO John Roberts said during a conference call with investors. “But what I remain confident in is [that] the strategic decisions and the direction and course we are on is well-charted. Our conservative nature, financial discipline and coming from a position of strength has afforded us the opportunity to invest throughout this period to better prepare us for the eventual turn. We stand ready. Our company and our teams are working hard.”
J.B. Hunt said the Q1 revenue decline was primarily driven by a 9% decrease in gross revenue per load across the intermodal and truckload segments, 22% fewer loads in the Integrated Capacity Solutions segment and a modest decline in average trucks and productivity in Dedicated Contract Services. These declines were partially offset by Final-Mile Services revenue growth.
Our first quarter earnings were released today. Watch this video to hear from J.B. Hunt President Shelley Simpson. To read the full earnings press release, visit https://t.co/DpLmKZJNwr. https://t.co/HwRkR7LJkC — J.B. Hunt 360 (@jbhunt360) April 16, 2024
The company’s Q1 results missed expectations from investment analysts on Wall Street, who had been looking for EPS of $1.53 per share and quarterly revenue of $3.12 billion, according to Zacks Consensus Estimate.
J.B. Hunt’s truckload segment revenue in Q1 declined 13% year-over-year to $178.3 million compared with $205.9 million. This was due to a 9% decline in revenue per load and a 5% decline in load volume. The total average effective trailer count also decreased by 2% versus the prior-year period. Operating income in the segment fell 75% to $1.23 million compared with $4.99 million during the same time last year.
FMS segment revenue rose 2% to $229.3 million compared with $225.1 million the prior year. The increase was primarily driven by new contracts implemented over the past year and various business improvement efforts, but was partially offset by general weakness in demand across many end-markets. Operating income jumped 128% to $15.1 million from $6.62 million, which included a $3.1 million benefit from a claim settlement.
ICS segment revenue decreased 26% to $285.3 million compared with $384.8 million, while overall segment volume decreased 22% versus the prior year. Revenue per load decreased 5% due to lower contractual and transactional rates and changes in customer freight mix. The segment’s Q1 operating loss widened to $17.5 million compared with a loss of $5.37 million last year. The decline came largely from an $11 million decrease in gross profit, higher insurance costs and integration costs related to the purchase of the brokerage assets of BNSF Logistics. These items were partially offset by lower personnel-related and technology costs.
DCS segment revenue decreased 2% to $860 million from 879.1 million, driven by a 1% decline in average trucks in service combined with a 1% decline in productivity as defined by gross revenue per truck per week. There were 71 fewer revenue-producing trucks in the fleet at the end of the quarter compared with the prior-year period. Operating income in the segment declined 9% to $93.6 million from $102.6 million, driven primarily by lower revenue and higher new account startup costs as well as increases in insurance premiums, equipment and debt expense, J.B. Hunt said.
Intermodal segment revenue decreased 9% to $1.4 billion from $1.54 billion. The report noted that overall demand in Q1 for domestic intermodal service was weaker than expected, partially attributable to competition from over-the-road truck options in the eastern network. Gross revenue for the segment decreased 9% in Q1 due to changes in the mix of freight, customer rates and a drop in fuel surcharge revenue. Operating income fell 40% to $101.9 million from $168.7 million due to increases in wages, benefits, equipment, maintenance and insurance expenses as a percentage of gross revenue.
“JBHT struck a solemn tone to kick off transport earnings as 1Q results fell well below our estimates and consensus expectations,” TD Cowen analyst Jason Seidl said. “[Initial margin] rates should continue to reset lower while management looks to grow into its cost base. Hopes of a 2H recovery become increasingly challenged given current setup.”
J.B. Hunt Transport Services Inc. ranks No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. It also ranks No. 3 on the TT Top 100 logistics companies list.
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