What's In Store For J.B. Hunt (JBHT) This Earnings Season?

J.B. Hunt Transport Services Inc. (NASDAQ:JBHT) is slated to release first-quarter 2017 results, on Apr 17 before the market opens.

In the last quarter, the company posted a negative earnings surprise of 3% as it results were hurt by higher operating expenses. The bottom-line also declined 4% on a year-over-year basis. This was due to declining demand and low fuel surcharge revenues.

Earnings Whispers

Our proven model does not conclusively show that J.B. Hunt is likely to beat the Zacks Consensus Estimate this quarter. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to increase the odds of an earnings surprise. However, that is not the case as highlighted below.

Zacks ESP: The Earnings ESP for J.B. Hunt -2.27%, The Most Accurate estimate stands at $0.86 while the Zacks Consensus Estimate is poised at $0.88. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s -2.27% ESP complicates our surprise prediction.

Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

Factors Likely at Play

J.B. Hunt continues to grapple with declining demand and low fuel surcharge revenues. This is likely to hurt results in the first-quarter. Higher costs may hurt the bottom-line in the first quarter.

Adding to its woes is volatility in fuel prices. Lower fuel surcharge can impact the company’s annual core price increase, thus affecting revenues. Moreover, lower truck revenues might hurt the top line in the first quarter. However, the Integrated Capacity Solutions division is expected to perform well due to increased load volumes.

We are also impressed by the company’s efforts to reward shareholders through dividend payments and share repurchases.

Price Performance

We remind investors that J.B. Hunt stock underperformed the Zacks categorized Transportation - Truck industry over the last three months due to multiple headwinds. The company lost 7.72%, while the industry lost 4.57%.

Stocks to Consider

Investors interested in the broader transportation sector may consider Air Lease Corporation (NYSE:AL) , C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) and Kansas City Southern (NYSE:KSU) as our model shows it possesses the right combination of elements to post an earnings beat in its next release.

Air Lease Corporation has an Earnings ESP of +3.49% and carries a Zacks Rank #3. The company beat the Zacks Consensus Estimate in each of the last four quarters, with an average positive surprise of 40.66%. The company, will release its first-quarter 2017 results on May 4.

C.H. Robinson has an Earnings ESP of +1.25% and carries a Zacks Rank #3. The company will release its first-quarter 2017 results on Apr 25.

Kansas City Southern has an Earnings ESP of +1.72% and carries a Zacks Rank #3. The company will release its first-quarter 2017 results on Apr 21. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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