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J.B. Hunt (JBHT) to Report Q3 Earnings: A Beat in the Cards?

Zacks Equity Research

J.B. Hunt Transport Services Inc. JBHT is slated to report third-quarter 2019 results on Oct 15, after the market closes.

Last reported quarter, the company delivered a positive earnings surprise of 1.5%. Although total revenues increased year over year, the top line fell short of the Zacks Consensus Estimate. Strong performance by the Dedicated Contract Services (DCS) segment aided results.

Let’s see how things are shape up for this reporting cycle.

Why a Likely Positive Surprise?

The proven Zacks model shows that J.B. Hunt is again likely to beat on earnings in the third quarter on the back of a perfect combination of the following two key ingredients:

Earnings ESP: J.B. Hunt has an Earnings ESP of +0.60%. This is because the Most Accurate Estimate is pegged at $1.45 while the Zacks Consensus Estimate stands marginally lower at $1.44. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt currently carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 when combined with a positive ESP have significantly higher chances of beating estimates.
 
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

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. price-eps-surprise | J.B. Hunt Transport Services, Inc. Quote


Factors Likely at Play

Akin to the previous quarters, the company’s Dedicated Contract Services (DCS) segment is likely to put up a strong performance in the third quarter as well. Evidently, the Zacks Consensus Estimate for third-quarter revenues at the DCS segment stands at $700 million, indicating a convincing rise from $543 million reported in the year-ago quarter. The same for the Intermodal (JBI) segment is pegged at $1,224 million, suggesting an increase from $1,218 million reported in the third quarter of 2018.

With the combination of DCS and JBI segments contributing more than 70% to the top line, impressive performances from these units should provide a substantial boost to total revenues in the third quarter. Additionally, the Cory 1st Choice Home Delivery acquisition is expected to drive results in the upcoming quarterly release.

However, high operating expenses due to buyout-related costs and other expenses might weigh on the company’s bottom line in the soon-to-be-reported period. Moreover, increased expenses are likely to cause a deterioration in operating ratio (operating expenses as a percentage of revenues) in the quarter as has been the case in the last two quarters of 2019. Lower the value of this key metric, the better.

Other Stocks to Consider

Investors interested in the broader Transportation sector can also check out Expeditors International of Washington, Inc. EXPD, Allegiant Travel Company ALGT and Southwest Airlines Co. LUV as these stocks too possess the right mix of elements to beat on earnings in their next releases.

Expeditors has an earnings ESP of +0.74% and a Zacks Rank of 3. The company will report third-quarter 2019 results on Nov 5.

Allegiant has an Earnings ESP of +6.14% and a Zacks Rank #2. The company will announce third-quarter earnings results on Oct 24. You can see the complete list of today’s Zacks #1 Rank stocks here.

Southwest has an Earnings ESP of +0.31% and is Zacks #3 Ranked. This company will release third-quarter financial numbers on Oct 24.

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Allegiant Travel Company (ALGT) : Free Stock Analysis Report
 
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
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