J.B. Hunt to pay $44 million in arbitration case with BNSF
by October 30, 2019 7:07 pm 3,471 views
Lowell-based carrier J.B. Hunt Transport Services Inc. is expected to pay $44.2 million as a result of an arbitration between the carrier and Fort Worth, Texas-based BNSF Railway Co., according to a news release. J.B. Hunt announced Wednesday (Oct. 30) the receipt of the arbitrators’ final award issued Oct. 24 in the arbitration case.
The details of the final award are confidential; however, J.B. Hunt will have pre-tax charges in the third quarter of $26.8 million related to charges claimed by BNSF for the period of Jan. 1, 2018, through Dec. 31, 2018, and no material adjustments for the period Jan. 1, 2019, through Sept. 30, 2019.
Also, J.B. Hunt will have a $17.4 million charge for legal fees, costs and interest claimed by BNSF, and this will come to a total of $44.2 million, or 30 cents per diluted share.
The company announced Oct. 15 third-quarter earnings before receiving the final award and will update the financial results to reflect the charges. As a result, operating income in the third quarter declined 4% to $167.9 million, from $174.7 million in the same period in 2018. Earnings per share declined 7.6% to $1.10 per diluted share, from $1.19 per diluted share in the third quarter of 2018.
In the intermodal segment, operating income fell 26% to $88.7 million, from $120.3 million. No other reporting segments of the company were impacted as a result of the final award.
In the fourth quarter of 2018, J.B. Hunt paid $134 million after arbitrators issued a clarified interim award. The amount was for the periods of May 1, 2016, through Dec. 31, 2017, and Jan. 1, 2018, through Dec. 31, 2018. In October 2018, the carrier announced it would pay $18.3 million related to charges claimed by the railroad company for customer services between April 2014 and May 2018.