J.B. Hunt exceeds expectations for first-quarter revenue, earnings

Lowell-based carrier J.B. Hunt Transport Services Inc. posted double-digit earnings and revenue increases in the first quarter as the carrier saw growth across all segments.

After the markets closed Monday (April 18), J.B. Hunt reported first-quarter earnings rose by 65.9% to $243.32 million, or $2.29 per share, from $146.6 million, or $1.37 per share, in the same period in 2021. Revenue rose by 33.2% to $3.48 billion, from $2.61 billion.

J.B. Hunt beat earnings expectations of $1.94 per share, based on a consensus of 20 analysts. It also beat revenue expectations of $3.28 billion.

In a research brief, analysts Justin Long and Jack Atkins, senior associate George Sellers and associate Cameron Hoglund, all of Little Rock-based Stephens Inc., noted the company benefited from $18 million in equipment sale gains, contributing to an earnings impact of 13-cents per share. They added that the majority of the benefit came from the intermodal segment.

“Overall, this was a solid quarter, and we continue to feel (J.B. Hunt’s) diversified model will help the company navigate cyclical volatility,” the analysts said.

In the earnings call, J.B. Hunt executives highlighted costs and labor issues as a result of the omicron variant of COVID-19, intermodal segment velocity affecting container use, and capacity issues related to equipment and driver availability.

CEO John Roberts said so far this year the company has hired more than 1,400 drivers. He also noted the company’s plans to expand intermodal capacity by 40% over the next three to five years and the start of an inclusion council.

Total freight transactions attributed to technology platform Marketplace for J.B. Hunt 360 rose by 36% to $600 million in the first quarter, from $430 million in the same period in 2021.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Monday at $171.45, down 56 cents or 0.33%. In the past 52 weeks, the stock has ranged between $155.11 and $218.18.

Following is a breakdown of the carrier’s financial report by segment:

• INTERMODAL

Operating income rose by 87% to $200.9 million, from $107.46 million in the same period in 2021. Segment income comprised 60% of the carrier’s income.

Revenue increased by 36% to $1.6 billion, from $1.17 billion in the same period in 2021. Segment revenue comprised 46% of the carrier’s income.

The carrier attributed the revenue increase to a 28% increase in revenue per load and a 7% rise in load volume.

• DEDICATED CONTRACT SERVICES

Operating income increased by 4% to $77.1 million, from $74.33 million. Segment income comprised 23% of the carrier’s income.

Revenue rose 28% to $741.3 million, from $579.95 million. Segment revenue comprised 21% of the carrier’s revenue.

According to the carrier, segment revenue rose as a result of a 20% increase in average revenue-producing trucks and a 6% increase in fleet productivity.

• BROKERAGE

Operating income increased by 243% to $24.96 million, from $7.26 million.

Revenue rose by 29% to $675.39 million, from $524.94 million.

• TRUCK

Operating income increased by 210% to $31.49 million, from $10.17 million.

Revenue rose by 77% to $264.34 million, from $149.53 million.

• FINAL MILE SERVICES

Operating loss of $180,000, compared to income of $8.49 million.

Revenue rose 8% to $218.45 million, from $201.88 million.

BROADER TRENDS
According to the Cass Transportation Index Report, the shipments component of the Cass Freight Index rose 0.6% in March, from the same month in 2021. The growth was slower than the 3.6% year-over-year increase in February. The report showed that while shipment growth slowed in the first quarter as a result of the COVID omicron variant, freight was slowing before the war in Ukraine started.

“The threat of freight recession has risen recently as services reopen, inflation presses up interest rates, and – though war-related effects are likely to be modest in the near-term – higher energy prices have an increasingly negative effect over time,” according to the report. “We’re certainly seeing a freight slowdown and spot market correction, but in our view, it is too early to call it a freight recession.”