J.B. Hunt 4Q earnings fall, revenue rises

Lowell-based carrier J.B. Hunt Transport Services Inc. missed earnings and revenue expectations amid a softer freight market in the fourth quarter of 2022. Still, revenue rose by 4.3%, while earnings declined by 16.8% in the quarter from the same period in 2021.

Before the markets opened Wednesday (Jan. 18), J.B. Hunt reported fourth-quarter earnings fell to $201.3 million, or $1.92 per share, from $242.2 million, or $2.28 per share, in the same period in 2021. Revenue rose to $3.64 billion from $3.49 billion.

The carrier missed earnings expectations of $2.46 per share, based on a consensus of 23 analysts. It missed revenue expectations of $3.82 billion.

In an earnings analysis, analysts Justin Long and Jack Atkins and associates Brady Lierz and Grant Smith, all of Little Rock-based Stephens Inc., said the carrier’s results were “operationally in line, albeit very messy.” The results were affected by a $64 million rise in casualty claim expense and the tax rate. Also announced Wednesday, the carrier’s nearly $9 million in appreciation bonus to employees comprised a 6 cents per share impact on earnings.

The results were mixed when broken down by business segment, “but as expected, we believe a weak freight market and peak season pressured the business in (the fourth quarter of 2022) with intermodal volumes down 1% (year-over-year) and (truckload) brokerage volumes down 21% (year-over-year).”

In the earnings call, President Shelley Simpson attributed the weaker freight market to a customer inventory correction that’s expected to continue through the first quarter of 2023. Still, executives expect the market to improve later in the year. Executives also discussed some improvements in hiring employees and acquiring equipment. CEO John Roberts noted the company’s focus on claims and that the carrier will buy from a third equipment manufacturer.

In the fourth quarter, total freight transactions in the Marketplace for J.B. Hunt 360, the carrier’s technology platform, decreased by 22% to $461 million, from $593 million in the same period in 2021.

For 2022, earnings increased by 27.4% to $969.35 million, or $9.21 per share, from $760.8 million, or $7.14 per share. Revenue rose by 21.7% to $14.81 billion from $12.16 billion.

Based on a consensus of 24 analysts, the carrier missed 2022 earnings expectations of $9.74 per share. It also missed 2022 revenue expectations of $14.97 billion.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Tuesday (Jan. 17) at $176.29, down 51 cents or 0.29%. In the past 52 weeks, the stock has ranged between $153.92 and $218.18.

Following are fourth-quarter results by segment compared to the same period in 2021:

• Intermodal
  Operating income declined by 8% to $179.52 million from $195.33 million. Revenue rose by 11% to $1.74 billion from $1.57 billion. The Stephens analysts noted that excluding the insurance charge, intermodal was in line with their expectations.

• Dedicated
  Operating income rose by 4.3% to $75.78 million from $72.63 million. Revenue increased by 23.5% to $880.21 million from $712.41 million. The segment missed expectations by 2 cents, according to Stephens analysts.

• Brokerage
  The segment reported an operating loss of $2.87 million, compared to an operating income of $21.19 million. Revenue fell by 32.8% to $496.19 million from $738.9 million. The segment beat Stephens analysts’ expectations by 5 cents.

• Truckload
  Operating income fell by 34.7% to $16.91 million from $25.9 million. Revenue increased by 6.3% to $275.55 million from $259.07 million. The segment beat Stephens analysts’ expectations by 4 cents.

• Final Mile
  Operating income rose by 69.7% to $12.63 million from $7.44 million. Revenue rose by 14.8% to $254.8 million from $221.9 million. The segment beat Stephens analysts’ by 6 cents.