J.B. Hunt Transport Services Inc. of Lowell (Nasdaq: JBHT) on Tuesday reported mixed first-quarter results, with record volume in its intermodal segment but softness elsewhere.
Net income was $117.7 million, down 7.6% from $127.5 million in the same period a year ago. Per share, earnings came to $1.17.
The trucking and logistics company attributed the decrease primarily due to falling revenue in its dedicated contract services segment and lower yields in its truckload segment. Rising expenses for insurance, group medical care, and equipment and maintenance also weighed on profits.
The results still surpassed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $1.15 per share.
Revenue in the quarter was $2.92 billion, slipping 1% from $2.94 billion from a year ago but in line with Wall Street expectations.
Shares of the company closed at $135.11 on Tuesday and fell more than 6% to $126.90 in after-hours trading. Over the past 12 months, shares have fallen more than 21%.
Results by segment are below
Intermodal
Intermodal operating income was $94.4 million, down 7% from $101.9 million a year ago.
Volume increased 8% to 521,821 loads, the highest first-quarter tally in company history. The company reported strength in its eastern network, with growth driven by “service execution and our value proposition.”
Gross revenue in the segment was $1.47 billion, up 5% from $1.4 billion in the first quarter of 2024. The increase primarily driven by rising total loads and was offset by a 2% decrease in gross revenue per load, resulting from changes in the mix of freight, customer rates, and fuel surcharge revenue.
Revenue per load excluding fuel surcharge revenue was down 1%.
Dedicated contract services
Operating income for dedicated contract services was $80.3 million, down 14% from $93.6 million a year ago.
The company said the decrease was primarily driven by lower revenue and higher expenses, with higher costs for insurance, group medical care, and equipment and maintenance. Those expenses were partially offset by lower bad debt expense, the maturing of new business onboarded over the past 12 months, and greater productivity and utilization of equipment.
Revenue in the segment was $822 million, falling 4% from $860 million. The result was driven by a 5% decline in average trucks and partially offset by a 2% increase in productivity (gross revenue per truck per week).
There were 630 fewer revenue-producing trucks in the fleet by the end of the quarter compared to a year ago. Customer retention rates are approximately 91%.
Integrated capacity solutions
Integrated capacity solutions posted a loss of $2.7 million, improving on a loss of $17.5 million a year ago.
The company attributed the improvement mostly to lower personnel-related and cargo claims expenses, reduced technology costs and a reduction in acquisition-related integration and transition costs. The segment also posted higher revenue per load and higher gross profit margins.
Revenue in the quarter was $268 million, down 6% from $285.3 million a year ago. Segment volume decreased 13%.
Revenue per load increased 8% compared to the first quarter of 2024 due to higher contractual and transactional rates as well as changes in customer freight mix.
Final mile services
Operating income for final mile services was $4.7 million, down 68% from $15.1 million a year ago, when the company reported a $3.1 million benefit from a claim settlement.
Income decreased primarily from lower revenue, higher insurance expenses, and increased group medical costs. These items were partially offset by lower personnel-related costs and facility rental expense.
Truckload
Operating income for truckload was $2 million, up 66% from $1.2 million a year ago.
The company attributed the increase primarily to better safety results, a more balanced network, and an overall continued focus on cost management and productivity. There were lower first-quarter casualty and cargo claims and personnel-related costs as a percentage of gross revenue.
Revenue was $166.6 million, down 7% from $178.3 million. Total average effective trailer count decreased by approximately 800 units, or 6%, versus the first quarter of 2024. Trailer turns in the quarter improved 9% from a year ago as a result of the continued focus on improving asset utilization with better network balance and velocity.
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