J.B. Hunt Shares Soar After Quarterly Earnings Report Beats Estimates
by October 15, 2014 5:50 am 127 views
Investors of J.B. Hunt Transport Services enjoyed a 5.5% gain in their share value Tuesday (Oct. 14) in active trading on the heels of the logistics giant reporting stellar third quarter results even with challenges within the industry.
The stock price rallied to $75.22, up $3.92 per share before noon Tuesday as the major market indices also logged big gains, led by lower oil prices helping transport stocks.
Lowell-based J.B. Hunt pocketed income of $102.41 million in the quarter ending Sept. 30. Profits rose 14% from $89.5 million posted in the prior year period. That equated to 87 cents per share, a 16% gain over the 75 cents returned a year ago and 3 cents better than Wall Street expected.
It wasn’t just bottom line profits that propelled Hunt higher. The diversified carrier also exceeded top line predictions posting revenue of $1.6 billion, compared to $1.44 billion a year ago. Analysts polled by Thomson Reuters expected revenue of $1.59 billion in the quarter.
Operating income for the quarter totaled $172 million versus $151 million for the third quarter 2013.
Hunt officials attributed results to higher rates and increased load volume in three of its four operating segments. The company also cited higher operating costs related to driver recruitment, higher pay for third party drivers, increases in mileage pay, rising equipment costs and escalating insurance and workers compensation expense.
Interest expense in the quarter increased from a year ago due to higher debt levels primarily from increased net capital expenditures.
The Street.com analysts see some important positives in J.B. Hunt which they believe will outweigh perceived weaknesses in the sector, which is why they give the stock a “buy” rating.
“The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins,” Street.com analysts note.
Read more about the sector breakdown of J.B. Hunt’s most recent earnings in this report from our content partner, The City Wire.