A 22% operating income gain in J.B. Hunt Transport Services’ intermodal division helped the Lowell-based company beat second quarter earnings and revenue expectations.
The company reported Monday morning (July 16) second quarter net income of $151.652 million, up 55% compared to the same period in 2017. Earnings per share hit $1.37, well ahead of the 88 cents per share in the second quarter of 2017 and also above the consensus estimate of $1.28.
Second quarter revenue was $2.139 billion, also better than the $1.726 billion in the same quarter of 2017. The revenue also beat the consensus estimate of $2.06 billion.
Net income in the first half of 2018 is $269.794 million, up 34.5% compared to the same period in 2017. Total revenue in the first half of 2018 is $4.087 billion, compared with $3.356 billion in the first half of 2017.
“The benefits of customer rate increases, volume growth, and increases in revenue producing truck counts were partially offset by increases in rail, over the road and outsourced dray purchased transportation costs, start-up costs associated with new DCS contracts, higher driver wages and recruiting costs, increased office and support personnel costs, increased technology costs for structural upgrades, and further development of J.B. Hunt 360, increased losses on the sale of equipment and increased equipment maintenance and facility costs,” the company said of its second quarter results.
J.B. Hunt’s Intermodal division, its largest by revenue, posted second quarter revenue of $1.16 billion, up 16%. Operating income rose 22% to $134 million. The company said load volumes were up 4% compared with the same quarter of 2017, and revenue per load was up 8%.
The Dedicated Contract Services division had second quarter revenue of $530 million, up 29%. Operating income in the segment was $58.5 million, up 20%. Revenue per truck per week rose 10% in the quarter.
The Integrated Capacity Solutions (logistics) segment had revenue of $347 million in the quarter, up 56% compared with the same quarter in 2017. Operating income was $14.9 million compared with a $200,000 loss in the 2017 quarter. Pricing and volume helped the segment’s top and bottom lines.
“Volumes increased 38% while revenue per load increased approximately 13%, primarily due to increased contractual and spot rates compared to second quarter 2017. Spot volumes increased 63% and contractual volumes increased 28% from a year ago,” the company noted in the earnings report.
The trucking division posted quarterly revenue of $101 million, up 7%. Operating income was $7.5 million, up 35%. Revenue per load rose 14% – excluding fuel surcharges – during the quarter.
Despite the solid second quarter report, J.B. Hunt shares (NASDAQ: JBHT) were trading at $117.15 in late morning trading, down almost 5%. During the past 52 weeks the share price has ranged between $131.74 and $88.83.