JB Hunt 2Q Net Income Down 7 Percent

by Arkansas Business Staff  on Monday, Jul. 17, 2017 11:54 am   2 min read

(J.B. Hunt Transport)

J.B. Hunt Transport Services Inc. of Lowell reported second-quarter net income of $97.9 million, down nearly 7 percent from the same quarter last year, and earnings per share that missed analysts' expectations.

Shares of the logistics company (Nasdaq: JBHT) dropped about 2 percent in pre-market trading but rebounded by mid-morning, up about 2 percent to $93.92.

The company said second-quarter earnings per share was 88 cents, less than the FactSet consensus of 91 cents and down from 92 cents in the same quarter last year.

Total operating revenue was $1.73 billion, up 7 percent from $1.62 billion in the same quarter last year. Operating income was $164 million, down about 7 percent from the same quarter last year.

In a news release, the company said the benefits of volume growth and revenue producing truck counts were offset by a host of higher costs, including start-up costs associated with new Dedicated Contract Services contracts, driver wages, driver recruiting costs, and equipment and facilities maintenance costs.

The company also posted a revised outlook for 2017, noting that its Truck division would post between $370 billion and $390 billion in revenue.

The company's results by segment:

Intermodal — Quarterly revenue was $1 billion, up 7 percent; operating income was $110 billion, up 4 percent. The company said cost increases in rail purchased transportation; driver pay and retention costs; driver recruiting costs; technology development and modernization costs; and equipment ownership costs offset gains in volume growth and dray fleet productivity. 

Dedicated Contract Services — Revenue was $412 million, up 8 percent; operating income was $49 million, down 4 percent. The company said operating income was affected by increases in driver wages, higher insurance and claims costs, and higher start-up expenses for new customer contracts. 

Integrated Capacity Solutions — Revenue was $22 million, up 9 percent; operating loss was $200,000, down 102 percent. The company attributed the operating loss to lower gross profit margins, increased claims cost, a higher number of branches open less than two years and higher technology development costs. 

Truck — Revenue was $95 million, down 4 percent; operating income was $5.6 million, down 37 percent. The company said higher customer rates per mile was offset by increased driver pay and hiring costs, higher independent contractor cost per mile and increased tractor maintenance costs.



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