HUN or PX: Which Is the Better Value Stock Right Now?
J.B. Hunt Transport Services, Inc. JBHT reported mixed results in the first quarter of 2018. While the company posted better-than-expected revenues, earnings per share lagged expectations in the quarter.
This transportation company’s earnings of $1.07 per share fell short of the Zacks Consensus Estimate by 2 cents. However, the bottom line improved 16.3% on a year-over-year basis despite higher operating expenses. In fact, the 19.6% year-over-year increase in revenues to $1,948.2 million aided results. The top line also cruised ahead the Zacks Consensus Estimate of $1,872.1 million.
The revenue beat seems to have pleased investors. Consequently, the stock gained in early trading despite the earnings miss. Operating income also increased 13% to $169 million (on a reported basis) backed by volume growth among other factors.
In the quarter under review, this Zacks Rank #3 (Hold) company did not repurchase shares. J.B. Hunt stated that $521 million were remaining under its share buyback program as of Mar 31, 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Intermodal division reported quarterly revenues of $1.07 billion, up 14% year over year. Load volumes in the segment were up 6%. Revenue per load, excluding fuel surcharge revenues, increased 4% on a year-over-year basis. Operating income increased 20% year over year backed by volume growth and customer rate increases among other factors.
Dedicated Contract Services revenues increased 26% year over year to $494.5 million. The company added new trucks to the fleet in the first quarter while customer retention rates remained above 98%. Operating income decreased 9% year over year to $41 million, primarily due to foul weather and increased costs like driver wages.
Integrated Capacity Solutions revenues surged 41% year over year to $296.1 million. Revenue per load improved 34% on a year-over-year basis driven by the vibrant market for spot pricing. Spot volumes increased 43% in the quarter under review. Operating income surged 99% on the back of factors like increased gross margin and higher revenue per load.
Truck revenues decreased 1% to $92.7 million. At the end of the quarter, J.B. Hunt operated 1,926 tractors, down 10% year over year. Trailers decreased 6.4% to 7,036 in the quarter under review. Operating income increased 4% to $5 million, courtesy of favorable factors like higher revenue per load.
J.B. Hunt Transport Services, Inc. Price and EPS Surprise
J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote
At the end of the first quarter, cash and cash equivalents were $7.12 million compared with approximately $14.61 million at the end of 2017.
Long-term debt was $752.42 million compared with $1.09 billion at the end of 2017.
Investors interested in the broader Zacks transportation sector are keenly awaiting first-quarter earnings reports from key players like United Continental Holdings, Inc. UAL, Allegiant Travel Company ALGT and Spirit Airlines SAVE in the coming days. While United Continental is scheduled to report on Apr 17, Allegiant and Spirit Airlines will do the same on Apr 25 and Apr 26, respectively.
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