Hub Group Inc (HUBG) Reports Q3 2023 Earnings: Revenue of $1.0 Billion and EPS of $0.97
Hub Group Inc (NASDAQ:HUBG) reports Q3 2023 diluted earnings per share (EPS) of $0.97 and revenue of $1.0 billion.
Operating income for the quarter was $43 million, driven by the performance of the Logistics Segment.
The company ended the quarter with a strong balance sheet, with cash and cash equivalents of over $400 million.
Hub Group Inc (NASDAQ:HUBG) announced a comprehensive capital allocation plan, including a stock split, regular quarterly cash dividend, new share repurchase authorization, and long-term leverage target.
On October 26, 2023, Hub Group Inc (NASDAQ:HUBG) announced its third-quarter 2023 results, reporting a net income of $30 million and diluted earnings per share of $0.97. This compares to a net income of $87 million, or $2.61 per diluted share, for the third quarter of 2022. The company's results were impacted by lower gain on sale of assets, increased repair and maintenance expense, higher medical claims expense, and an increase in allowance for customer receivables, as well as consulting and office closure costs.
Financial Performance and Challenges
Consolidated revenue for the third quarter of 2023 was $1.0 billion, compared to $1.4 billion in the third quarter of 2022. The decline in revenue was driven by changes in customer rates and volumes in the company's ITS and Logistics Segments. Despite a soft freight environment, the company's Logistics Segment contributed nearly 70% of the operating income in the quarter.
Capital Allocation Plan
Hub Group Inc (NASDAQ:HUBG) also announced a comprehensive growth-focused capital allocation plan designed to drive long-term value creation and shareholder returns. The plan includes a 2:1 stock split through a stock dividend in January 2024, initiation of a quarterly cash dividend program, a new $250 million share repurchase plan, and a long-term leverage target of 0.75-1.25x net debt/EBITDA.
Financial Tables Summary
The company's operating income for the quarter was $43 million (4.2% of revenue), compared to $118 million (8.7% of revenue) in the prior year. EBITDA (non-GAAP) for the quarter was $88 million. The company's cash and cash equivalents as of September 30, 2023, were $401 million.
2023 Outlook
Hub Group Inc (NASDAQ:HUBG) expects its 2023 diluted earnings per share to range from $5.30 to $5.40. The company estimates revenue will be approximately $4.2 billion and projects an effective tax rate for the year of approximately 20%. Capital expenditures for containers, tractors, warehousing equipment, and technology are expected to range from $140 to $150 million.
Explore the complete 8-K earnings release (here) from Hub Group Inc for further details.
This article first appeared on GuruFocus.
