J.B. Hunt Q1 Profit Down 6%, Misses View; But Revenues Beat

(RTTNews) - Surface transportation company JB Hunt Transport Services, Inc. (JBHT) on Monday reported a 6 percent decline in profit for the first quarter from last year, as higher revenues were more than offset by costs related to rail service disruptions and winter storms in the Midwest and Northeast. Earnings per share missed analysts' expectations, while revenues slightly beat their estimates.

John Roberts III, President and CEO of J.B. Hunt Transport, said, "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. 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."

The Lowell, Arkansas-based company reported net earnings for the first quarter of $68.66 million or $0.58 per share, down from $73.35 million or $0.61 per share in the year-ago period. On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total operating revenue for the quarter grew 9 percent to $1.41 billion from $1.29 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.40 billion for the quarter.

Operating income for the quarter declined 6 percent from the same period last year to $117.31 million, primarily due to increased costs incurred to recover from rail service disruptions and weather effects.

Segment-wise, intermodal or JBI segment reported revenues for the first quarter of $835.50 million, up 5 percent from last year. According to the company, rail service disruptions and a series of winter storms in the Midwest and Northeast adversely affected load growth in Intermodal. These factors limited JBI load growth to 5 percent over the year-ago period.

But these same factors helped create a tighter trucking market that helped Integrated Capacity Solutions or ICS increase load growth by 3 percent and revenue per load by 29 percent. Integrated capacity solutions segment's revenues surged 33 percent from the year-ago period to $162.63 million.

Dedicated Contract Services segment revenues increased 15 percent to $322.04 million, primarily from 2013 start-ups becoming fully implemented and new contracts signed in the latest quarter. Meanwhile, truck segment revenues declined 9 percent from last year to $92.47 million, reflecting a 9 percent reduction in fleet size and lower utilization per truck from the winter weather in January and February.

Looking ahead, John Roberts said, "While additional costs incurred this quarter due to the severity of the winter weather should become less pronounced, increases in driver costs, equipment costs and insurance costs are more likely to persist and must be recovered from the marketplace through revenue management in the bid cycles and customer contract discussions."

In Monday's regular session, JBHT is trading at $73.60, up $2.09 or 2.92 percent on a volume of 376,251 shares.