J.B. Hunt (JBHT) Q3 Earnings Miss Estimates, Sales Beat

J.B. Hunt Transport Services Inc. (NASDAQ:JBHT) delivered mixed results in the third quarter of 2017. The company reported lower-than-expected earnings per share but better-than-expected revenues.

This transportation company’s earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents. The bottom line also dipped 6.2% on a year-over-year basis due to higher operating expenses. In fact, the results were hurt by hurricanes Harvey, Irma and Maria. The earnings miss disappointed investors. Consequently, the stock declined in early trading.

Total operating revenue increased 9.1% year over year to $1,843.3 million and also surpassed the Zacks Consensus Estimate of $1,826.8 million. Excluding fuel surcharges, operating revenues increased 8% year over year.

Operating income in the third quarter decreased 9.8% to $165 million. Higher costs like increased driver wages hurt the metric in the reported quarter. Interest expenses increased on a year-over-year basis primarily owing to higher debt balances.

The effective income tax rate in the third quarter is 35.9% compared with 38% a year ago. J.B. Huntexpects a tax rate of 35% for full-year 2017. During the quarter, this Zacks Rank #3 (Hold) company did not repurchase shares. 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 $1.05 billion, up 8% year over year. Overall volumes in the segment climbed 6%. Revenue per load, excluding fuel surcharge revenues, was flat on a year-over-year basis. Operating income declined 7% year over year due to higher costs.

Dedicated Contract Services revenues increased 11% year over year to $438 million. The company added new trucks to the fleet and customer retention rates remained above 98%. Operating income decreased 18% year over year to $42.9 million, primarily due to increased costs like driver wages.

Integrated Capacity Solutions revenues surged 16% year over year to $269 million. Revenue per load improved 17% on a year-over-year basis. Load volumes inched down 1%. Operating income declined 14% due to higher costs.

Truck revenues decreased 5% to $93 million. At the end of the quarter, J.B. Huntoperated 2,040 tractors, down 6.6% year over year. Operating income increased 12% to $5.7 million owing to favorable factors like lower insurance and claims expenses.

Liquidity

At the end of the third quarter, cash and cash equivalents were $7.7 million compared with approximately $6.4 million at the end of 2016. Long-term debt was $1.08 billion compared with $986.3 million at the end of previous year.

Upcoming Releases

Investors interested in the transportation sector are keenly awaiting for third-quarter earnings reports from key players like Kansas City Southern (NYSE:KSU) (KSU) , Canadian National Railway Company (CNI) and Norfolk Southern Corp (NYSE:NSC). (NSC) in the coming days. While Kansas City Southern is scheduled to report on Oct 20, Canadian National and Norfolk Southern are scheduled to report on Oct 24 and Oct 25, respectively.

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