JB Hunt Posts Disappointing Earnings

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J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) reported third-quarter 2016 results before markets opened Monday. The trucking and transport company posted diluted earnings per share (EPS) of $0.97 on revenues of $1.69 billion. In the same period a year ago, the company reported EPS of $0.99 on sales of $1.59 billion. The results also compare to the Thomson Reuters consensus estimates for EPS of $1.03 and $1.68 billion in sales.

Revenue in the company’s Intermodal segment rose 2% to $970 million, due mainly to 7% volume growth offset by about a 4.2% decrease in revenue per load. Operating income dropped 7% year over year in the segment. Benefits from improved volumes, improved operating efficiencies from network balance and reduced reliance on third-party dray carriers were offset by lower customer rates, increases in rail purchased transportation rates, equipment ownership costs including lower box utilization, increased insurance and claims costs and increased costs to attract and retain drivers.

J.B. Hunt repurchased about 922,000 shares of common stock during the quarter with a total value of $74.8 million. The company said it has approximately $276 million remaining in its share repurchase authorization.

The company did not offer any further guidance in its published release. The consensus estimate for the fourth quarter calls for EPS of $1.08 on revenue of $1.73 billion. For the 2016 fiscal year, EPS is reckoned at $3.91 on revenue of $6.55 billion.

J.B. Hunt’s dedicated contract services segment saw revenues rise 6% and operating income jump 16%. The company added 50 trucks to the fleet compared with the prior quarter and said that its customer retention rates remain above 98%.

J.B. Hunt’s shares traded down about 1.2% in early trading Monday at $79.08 in a 52-week range is $63.58 to $89.43. The consensus 12-month price target was $88.86 before this morning’s report.

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