J.B. Hunt sees third quarter net income boost

J.B. Hunt Transport Services Inc.’s third quarter profits easily topped last year’s results but fell short of Wall Street expectations as the Arkansas trucking giant emerges from what company officials and industry analysts have term as a "multi-year recession."

For the period ended Sept. 30, J.B. Hunt reported net income of $52.2 million, or 41 cents a share, well beyond a year ago third quarter results of $40 million, or 31 cents a share, a year ago.

Wall Street analysts, on average, had expected the Lowell trucking giant to report third quarter earnings of 44 cents per share on revenue of $985.7 million, according to Thomson Reuters.

Third quarter 2010 results included $4 million of pretax expense related to a $5 million commitment to Arkansas Children’s Hospital, which reduced net earnings by 2 cents per diluted share.

Total operating revenue for the current quarter was $986 million, an 18% increase over the $834 million reported for the third quarter 2009. The Lowell-based trucking firm third quarter earnings were lifted by higher Intermodal segment volumes, significant growth in our Dedicated Contract Services (DCS) segment and revenue growth in our Truck segment. Utilization of equipment also improved significantly as did pricing in the Truck segment.

“We continue to distance ourselves from the ‘Great Recession’ by increased revenues, operating income, net earnings and EPS of 18%, 29%, 31% and 32%, respectively, over last year’s third quarter,” J.B. Hunt President and CEO Kirk Thompson said in a statement.

Independent online research firm Bedford Report said J.B. Hunt will benefit from the recent dramatic uptick for transportation services following several quarters of downturn caused by the recession.

"JB Hunt continues to try to recover pricing that was lost over the last two years and its profitability is expected to increase in the near term," said the Ft. Lauderdale, Fla.-based equities researcher, which does not offer "buy, sell or hold" recommendations for stocks it covers.

Like other Wall Street analysts, Bedford said the trucking industry represents a very important component of the US economy.

"The industry adds about 5% to the Gross Domestic Product each year, leading many to argue that the health of the trucking industry is a crucial indicator of economic recovery," Bedford said in an Oct. 1 industry report on J.B. Hunt’s stock.  "The trucking industry was hit exceptionally hard during the economic crisis with nearly 2000 companies going out of business and others reducing the size of their fleets. Only now has demand volume begun to rise, giving truckers improving fundamentals.”

During the current quarter, J.B. Hunt said it purchase approximately 746,000 shares of the company’s common stock for $25 million. The company has nearly $325 million remaining under a previously announced $500 million share repurchase authorization. Actual shares outstanding at Sept. 30, were approximately 123 million.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Thursday at $35.51, down 43 cents. The earnings report was issued after the markets closed. During the past 52 weeks, the share price has ranged from a $39.65 high to a $29.45 low.