J.B. Hunt (JBHT) Q4 Earnings Lag Estimates, Revenue Beat
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2023 earnings per share of $1.47 missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
Total operating revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenue, decreased approximately 6% year over year. The downfall was due to a 12% and 7% decline in volume in Integrated Capacity Solutions (ICS) and Truckload (JBT), respectively, a 10% and 13% decline in revenue per load, excluding fuel surcharge revenue, in Intermodal (JBI) and JBT, respectively, and a 12% decline in stops in Final Mile Services. These were partially offset by a 6% increase in volume in JBI, a 3% increase in productivity (revenue per truck per week excluding fuel surcharge revenue) in Dedicated Contract Services, and the revenue contribution from the acquisition of the brokerage assets of BNSF Logistics.
J.B. Hunt Transport Services, Inc. Price, Consensus and EPS Surprise
J.B. Hunt Transport Services, Inc. price-consensus-eps-surprise-chart | J.B. Hunt Transport Services, Inc. Quote
Operating income for the fourth quarter decreased 28% year over yearto $203.3 million owing to yield pressure in JBI, ICS and JBT, higher equipment-related costs, and increased insurance and claims expenses. Additionally, fourth-quarter 2023 included a $15.0 million net increase in loss on the sale of equipment compared with the prior-year period.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.62 billion, down 7% year over year, owing to a 13% decrease in revenue per load resulting from changes in the mix of freight, customer rates and fuel surcharge revenue, partially offset by the 6% increase in volume. Revenue per load, excluding fuel surcharge revenue, fell 10% year over year. Transcontinental network loads increased 13% year over year, while eastern network loads decreased 2%.
Operating income fell 28% year over yearowing to lower yields, partially offset by higher volume.
Dedicated Contract Services segment revenues fell 3% from the year-ago period to $884 million, owing to a 2% decline in average trucks combined with a modest decline in productivity (revenue per truck per week).
Operating income grew 8% year over yearowing to the maturing of new business onboarded over the trailing 12 months, lower maintenance cost, and greater productivity and utilization of equipment. These items were partially offset by higher equipment-related costs, a net $8.1 million increase in loss on the sale of equipment, and increased bad debt expense.
Integrated Capacity Solutions revenues decreased 25% year over year to $364 million. Segmental volumes decreased 12%. Revenue per load decreased 15% year over year owingto lower contractual and transactional rates and changes in customer freight mix.
JBHT reported an operating loss of $24.9 million in the fourth quarter compared with an operating loss of $3.2 million in the year-ago quarter. The loss was owing to a $24.3 million decrease in gross profit, higher leased equipment-related costs, and integration and transaction costs related to the purchase of brokerage assets of BNSF Logistics. These were partially offset by lower personnel and technology costs.
Truckload revenues fell 19% to $195 million. Excluding fuel surcharge revenues, segmental revenues fell19% owing to a 13% decline in revenue per load, excluding fuel surcharge revenue, and a 7% decline in load volume, partially offset by a 13% increase in average length of haul.
At the fourth-quarter end, total tractors and trailers were 1,958 and 15,071 compared with the year-ago quarter’s figures of 2,242 and 14,718, respectively.
Final Mile Services revenues fell 9% year over year to $243 million due to general weakness in demand across many of the industry verticals served.
Operating income decreased 5% year over yearowing to lower revenues, increased equipment-related costs, and higher insurance and claims expenses. These were partially offset by lower personnel expenses, maintenance costs, and bad debt expenses.
Liquidity & Buyback
J.B. Hunt exited the fourth quarter with cash and cash equivalents of $53.34 million compared with $75.19 million at the end of prior quarter. Long-term debt was $1,326.10 million compared with $1,195.70 million at the prior-quarter end.
In the fourth quarter of 2023, JBHT purchased almost 137,000 shares for $25 million. As of Dec 31, 2023, JBHT had approximately $392 million remaining under its share repurchase authorization.
Dividend Hike
Concurrent with the fourth quarter of 2023 earnings release, JBHT’s board of directors has approved a dividend hike of 2%, thereby raising its quarterly cash dividend from 42 cents per share to 43 cents. The raised dividend will be paid out on Feb 23, 2024, to all its shareholders of record as of Feb 9, 2024. The move reflects JBHT’s intention to utilize free cash to enhance its shareholders’ returns.
Currently, J.B. Hunt carries a Zacks Rank #3 (Hold).
Upcoming Releases
Investors interested in the broader Zacks Transportation sector can consider the following three #2 Ranked (Buy) stocks, which are slated to release their fourth-quarter 2023 results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Airlines Group Inc. (AAL) will release results on Jan 25. The Zacks Consensus Estimate for AAL’s fourth-quarter 2023 earnings has been revised upward by more than 100% in the past 90 days. AAL delivered a trailing four-quarter earnings surprise of 23.83%, on average.
Shares of AAL have gained 13.1% in the past three months.
Copa Holdings, S.A. CPA will release results on Feb 7. The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised upward by 5.1% in the past 90 days. CPA delivered a trailing four-quarter earnings surprise of 16.81%, on average.
Shares of CPA have gained 11.2% in the past three months.
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation WAB, will release results on Feb 14.
WAB has an expected earnings growth rate of 20.77% for fourth-quarter 2023. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s fourth-quarter 2023 earnings has improved 3.3% over the past 90 days. Shares of WAB have gained 25.7% in the past three months.
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J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
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