J.B. Hunt Q4 profit plummets 23%; revenue dips 9%

Lowell-based carrier J.B. Hunt Transport Services Inc. posted decreases in earnings and revenue in the fourth quarter amid freight market challenges and higher costs in insurance, labor and equipment.

After the markets closed Thursday (Jan. 18), J.B. Hunt reported fourth-quarter earnings fell by 23.7% to $153.53 million, or $1.47 per share, from $201.3 million, or $1.92 per share, in the same period in 2022. Revenue fell by 9.5% to $3.3 billion from $3.64 billion.

J.B. Hunt missed earnings estimates of $1.75 per share for the fourth quarter, based on a consensus of 21 analysts. It beat revenue estimates of $3.28 billion.

In an earnings report, analysts Justin Long and Jack Atkins and associates Brady Lierz, Grant Smith, and Collin Nieman, all of Little Rock-based Stephens Inc., said, “Operational results appear to be better than we feared and slightly above (Wall) Street expectations.” Excluding $53 million in insurance-related charges, the carrier’s adjusted earnings per share would’ve been $1.89, exceeding Wall Street estimates. Also, the lower tax rate comprised a 10-cent tailwind, “so operationally, we’re viewing this quarter as a slight beat.”

In the fourth-quarter earnings call, J.B. Hunt executives noted the high cost of insurance and claims and a challenging freight market that’s showing volume improvement in intermodal, the carrier’s largest business segment. Executives said as insurance costs rise, they are eventually passed on to consumers.

CEO John Roberts said 2023 marked “the company’s best performance in history on safety, measured by having our lowest DOT preventable accidents per million miles. We remain one of the safest carriers in the industry, yet our insurance rates continue to increase as the industry experiences higher verdicts and, as a result, higher litigation settlements.”

For 2023, earnings declined by 24.9% to $728.28 million, or $6.97 per share, from $969.35 million, or $9.21 per share, in 2022. Revenue fell by 13.4% to $12.82 billion from $14.81 billion.

J.B. Hunt missed earnings estimates of $7.25 per share for the year, based on a consensus of 23 analysts. It met revenue expectations of $12.8 billion.

The intermodal segment accounted for 48% of J.B. Hunt’s revenue and 57% of its operating income in 2023. The dedicated segment accounted for 28% of revenue and 41% of operating income.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Thursday at $196.94, up $5.23 or 2.73%. In the past 52 weeks, the stock has ranged between $163.66 and $209.21.

Following are fourth-quarter results by segment compared to the same period in 2022:

• Intermodal

Operating income fell by 27.6% to $129.89 million from $179.52 million. Revenue fell by 7.2% to $1.62 billion from $1.74 billion. Excluding insurance charges, the Stephens analysts said the segment beat estimates by 16 cents.

• Dedicated

Operating income rose by 7.9% to $86.14 million from $75.78 million. Revenue declined by 3.2% to $883.87 million from $913.08 million. Excluding insurance charges, the Stephens analysts said the segment beat estimates by 1 cent.

• Brokerage

The segment reported an operating loss of $24.94 million from a loss of $3.21 million. Revenue fell by 24.8% to $363.66 million from $483.59 million. Excluding insurance charges, the Stephens analysts said the segment beat estimates by 2 cents.

• Truckload

The segment reported an operating loss of $39,000 from income of $12.87 million. Revenue fell by 19.5% to $195.43 million from $242.67 million. Excluding insurance charges, the Stephens analysts said the segment missed estimates by 3 cents.

• Final Mile

Operating income fell by 5.2% to $12.29 million from $12.97 million. Revenue decreased by 9.1% to $243.16 million from $267.41 million. Excluding insurance charges, the Stephens analysts said the segment beat estimates by 1 cent.

QUARTERLY DIVIDEND
J.B. Hunt also announced Thursday that it would pay a 43 cents per share cash dividend on Feb. 23 to shareholders of record as of Feb. 9. The dividend is a 1-cent, or 2%, increase over the previous quarterly dividend.