J.B. Hunt revenue exceeds $12 billion in 2021; earnings up more than 50%

Lowell-based carrier J.B. Hunt Transport Services Inc. beat expectations for earnings and revenue for the fourth quarter and 2021 and surpassed $10 billion in annual revenue for the first time amid strong freight demand, rising rates and a tight labor market.

After the markets closed Tuesday (Jan. 18), J.B. Hunt reported fourth-quarter net income rose by 57.3% to $242.2 million, or $2.28 per share, from $154 million, or $1.44 per share, in the same period of 2020. Revenue rose by 27.7% to $3.49 billion, from $2.73 billion.

J.B. Hunt’s fourth-quarter earnings were expected to rise by $2.02 per share, based on a consensus of 19 analysts. Revenue was projected to rise by 19.7% to $3.28 billion for the period.

For 2021, net income rose by 50.3% to $760.8 million, or $7.14 per share, from $506 million, or $4.74 per share, in 2020. Revenue rose by 26.3% to $12.16 billion, from $9.63 billion. For the year, earnings were projected to increase to $6.83 per share, based on a consensus of 23 analysts. Annual revenue was expected to increase by 24.1% to $11.96 billion.

In a report, analysts Justin Long and Jack Atkins, senior associate George Sellers and associate Cameron Hoglund, all of Little Rock-based Stephens Inc., said “the outperformance was led by the intermodal segment with the highlights being a 22% increase in revenue per load and intermodal margins of 12.4%.” Other outperforming business segments included truck, Final Mile Services and brokerage. The dedicated segment missed expectations, but this was attributed to higher-than-expected startup costs. Also, company executives noted the recent bonuses put pressure on margins.

“We all thought 2020 was a remarkable year in our history, but I’ll consider 2021 as a good contender for being equally challenging,” CEO John Roberts said. “In the midst of perpetual challenge, we have continued to see our collective resiliency and strength carry us during these unique times. Our teams have adjusted and adapted to multiple scenario changes impacting our customers’ ability to thrive. In 2021, our leaders made bold calls to increase investments in our people, our technologies and in expanding our fleets across our asset base.”

Total freight transactions in the Marketplace for J.B. Hunt 360, the carrier’s freight matching technology platform, increased by 27% to $593 million in the fourth quarter, from $468 million in the same period in 2020. Brokerage revenue on the platform rose 11% to $431 million. Intermodal and truck revenue on the platform were $48 million and $113 million, respectively.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Tuesday at $200.49, down $1.58, or 0.78%. In the past 52 weeks, shares have ranged between $133.36 and $208.87.

SEGMENT RESULTS
Following are the results by segment:

• Intermodal
In the fourth quarter, revenue rose by 26% to $1.57 billion, from $1.24 billion in the same period in 2020. Operating income increased by 76% to $195.33 million, from $110.75 million.

For 2021, revenue increased to $5.45 billion, from $4.67 billion in 2020. Operating income rose to $602.54 million, from $428.4 million. The segment comprised 44% of revenue and 58% of operating income for the company in 2021.

• Dedicated
In the fourth quarter, revenue rose by 25% to $712.41 million, from $568.34 million in the same period in 2020. Operating income fell by 6% to $72.63 million, from $77.56 million.

For 2021, revenue increased to $2.57 billion, from $2.19 billion in 2020. Operating income fell to $304.12 million, from $313.98 million. The segment comprised 21% of revenue and 29% of operating income for the company in 2021.

• Brokerage
In the fourth quarter, revenue rose by 26% to $738.9 million, from $587.27 million in the same period in 2020. Operating income increased by 280% to $21.19 million, from $5.57 million.

For 2021, revenue increased to $2.53 billion, from $1.65 billion in 2020. Operating income of $46.32 million more than offset the loss of $44.69 million in 2020. The segment comprised 21% of revenue and 4% of operating income for the company in 2021.

• Final Mile Services
In the fourth quarter, revenue rose by 4% to $221.9 million, from $213.16 million in the same period in 2020. Operating income increased by 35% to $7.44 million, from $5.51 million.

For 2021, revenue increased to $841.96 million, from $688.43 million. Operating income of $27.9 million was a wide swing from the $945,000 loss in 2020. The segment comprised 7% of revenue and 3% of operating income for the company in 2021.

• Truck
In the fourth quarter, revenue rose by 85% to $259.07 million, from $140.38 million in the same period in 2020. Operating income increased by 210% to $25.9 million, from $8.36 million.

For 2021, revenue increased to $795.85 million, from $462.72 million in 2020. Operating income rose to $64.94 million, from $16.57 million. The segment comprised 7% of revenue and 6% of operating income for the company in 2021.

MARKET TRENDS
Freight demand continued to show strength in December in the contract and spot markets.
The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index, which largely comprises contract freight, increased by 1% in December, from November. The index was up 1.4% from December 2020.

“December’s gain was the fifth straight totaling 4.4%,” said ATA Chief Economist Bob Costello. “In December, tonnage reached the highest level since March, but it was still 2.7% below the pre-pandemic high. This is likely due to the fact ATA’s data is dominated by contract freight. Contractor truckload carriers operated fewer trucks in 2021 compared with 2020, and it is difficult to haul significantly more tonnage with fewer trucks. But overall, we have seen a nice trend up that is reflective of a still growing goods-economy.”

In the spot market, dry van truckload rates rose to new highs in December as prices were up 21.9% from the same month in 2020, according to DAT Freight & Analytics. The rates increased for the seventh consecutive month and rose to an average of $3 per mile for the first time. Spot truckload rates are negotiated for each load and paid to the carrier by a freight broker.

“While it’s not unusual to see a decline in the number of loads moved from November to December, spot-market volume was historically strong last month,” said Ken Adamo, chief of analytics at DAT. “Truckers experienced unparalleled demand during the holiday season.”