J. B. Hunt's (JBHT) Q1 Earnings Miss, Revenues Beat, Rise Y/Y

J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) reported mixed results in the first quarter of 2018. While the company posted better-than-expected revenues, earnings per share lagged expectations in the quarter.

This transportation company’s earnings of $1.07 per share fell short of the Zacks Consensus Estimate by 2 cents. However, the bottom line improved 16.3% on a year-over-year basis despite higher operating expenses. In fact, the 19.6% year-over-year increase in revenues to $1,948.2 million aided results. The top line also cruised ahead the Zacks Consensus Estimate of $1,872.1 million.

The revenue beat seems to have pleased investors. Consequently, the stock gained in early trading despite the earnings miss. Operating income also increased 13% to $169 million (on a reported basis) backed by volume growth among other factors.

In the quarter under review, this Zacks Rank #3 (Hold) company did not repurchase shares. J.B. Hunt stated that $521 million were remaining under its share buyback program as of Mar 31, 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Segmental Performance

The Intermodal division reported quarterly revenues of $1.07 billion, up 14% year over year. Load volumes in the segment were up 6%. Revenue per load, excluding fuel surcharge revenues, increased 4% on a year-over-year basis. Operating income increased 20% year over year backed by volume growth and customer rate increases among other factors.

Dedicated Contract Services revenues increased 26% year over year to $494.5 million. The company added new trucks to the fleet in the first quarter while customer retention rates remained above 98%. Operating income decreased 9% year over year to $41 million, primarily due to foul weather and increased costs like driver wages.

Integrated Capacity Solutions revenues surged 41% year over year to $296.1 million. Revenue per load improved 34% on a year-over-year basis driven by the vibrant market for spot pricing. Spot volumes increased 43% in the quarter under review. Operating income surged 99% on the back of factors like increased gross margin and higher revenue per load.

Truck revenues decreased 1% to $92.7 million. At the end of the quarter, J.B. Hunt operated 1,926 tractors, down 10% year over year. Trailers decreased 6.4% to 7,036 in the quarter under review. Operating income increased 4% to $5 million, courtesy of favorable factors like higher revenue per load.

Liquidity

At the end of the first quarter, cash and cash equivalents were $7.12 million compared with approximately $14.61 million at the end of 2017.

Long-term debt was $752.42 million compared with $1.09 billion at the end of 2017.

Upcoming Releases

Investors interested in the broader Zacks transportation sector are keenly awaiting first-quarter earnings reports from key players like United Continental Holdings, Inc. (NYSE:UAL) , Allegiant Travel Company (NASDAQ:ALGT) and Spirit Airlines (NYSE:SAVE) in the coming days. While United Continental is scheduled to report on Apr 17, Allegiant and Spirit Airlines will do the same on Apr 25 and Apr 26, respectively.

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