by Lance Turner
Posted 4/14/2014 08:46 am
Updated 5 months ago
J.B. Hunt Transport Services Inc. of Lowell reported a 6 percent decline in first-quarter profit, as harsh winter weather disrupted rail and trucking operations.
The publicly traded logistics giant (Nasdaq: JBHT) reported first-quarter net earnings of $68.7 million or 58 cents per share, down from $73.3 million or 61 cents per share in the same quarter last year. Revenue was up 9 percent to $1.41 billion.
Earnings per share missed analysts’ estimates by 3 cents. Revenue beat predictions by about $10 million.
"It was evident that the weather in the first quarter, particularly in January and February, played a significant role in both our growth and profitability," John N. Roberts III, J.B. Hunt’s president and CEO, said in a news release (PDF). "Feedback from our customers about their business expectations for the remainder of the year gives us encouragement that growth should return to our previously announced ranges."
J.B. Hunt noted the effects of weather in its operating income, which was $117 million in the first quarter, down 6 percent from $125 million in the same quarter last year. The company attributed the decline to “increased costs incurred to recover from rail service disruptions and weather effects.”
Dedicated Contract Services division saw profit decline from weather effects but also a greater reliance on third-party carriers "from the inability to hire a sufficient number of drivers in certain recruiting areas of the country."
Meanwhile, J.B. Hunt’s Integrated Capacity Solutions and Truck divisions reported an operating income increase from tighter truck capacity and gains on equipment sales.
"We were encouraged by the response our ICS business showed in dealing with the tighter truck market created by the weather, rail service disruptions and a very real driver shortage," Roberts said. "We were also encouraged by [the Truck division’s] improvements this quarter even as they dealt with a smaller independent contractor fleet that affected their revenue expectations."