J.B. Hunt Profits Rise, CEO Notes Driver Supply ‘Headwind’
by July 15, 2014 8:09 am 102 views
J.B. Hunt posted a solid improvement in quarterly earnings, but its CEO noted challenges surrounding driver recruitment and train transportation regulations.
The Lowell-based trucking and transportation giant posted second quarter earnings of $93.4 million on revenue of $1.55 billion. One year ago, J.B. Hunt’s second quarter net income was $87.7 million on revenue of $1.38 billion.
“The slowdown in train velocity and the difficult driver recruiting environment has challenged our growth in JBI [intermodal],” said J.B. Hunt CEO John Roberts. “We are pleased we were able to maintain profitability levels despite these obstacles. The worsening driver supply conditions will continue to be a headwind for DCS [dedicated contract services] and JBT [trucking division] as well. The planned improvement in JBT is ahead of schedule and though there is more to do, we are extremely pleased with the progress thus far.”
The trucking industry as a whole has struggled with driver shortages as baby boomers exit the workforce and younger drivers are less attracted to long-haul stints. The subject was a focus of a recent Talk Business in-depth story in May.
Key financial metrics for the different segments of J.B. Hunt included:
- Load growth of 8% in Intermodal (JBI) and 15% in Integrated Capacity Solutions (ICS), helped drive 9% and 31% increases in segment revenue, respectively.
- Dedicated Contract Services (DCS) segment revenue increased by 15% as productivity improved on large private fleet conversions implemented a year ago.
- Truck (JBT) segment revenue was flat with prior year with an 8% smaller fleet.
“While we continue to work to improve customer service and equipment utilization levels to achieve our expected market growth, the second quarter results demonstrate the combined earnings value of our four diversified, yet integrated, business units,” said Roberts.
J.B. Hunt shares (NASDAQ: JBHT) closed trading on Monday (July 14) at $74.29. The company’s stock has traded between $69.33 and $79.89 per share in the past year.