J.B. Hunt Transport Services Inc.'s net income rose more than 6 percent to $93.4 million, the company reported Tuesday in its second-quarter earnings.
Revenue was $1.55 billion, an increase of 12 percent for the Lowell-based Fortune 500 company. Earnings per share were 79 cents, up from 73 cents in 2013, matching analyst estimates. The trucker reported operating income of $159 million, up 8 percent.
"While we continue to work to improve customer service and equipment utilization levels to achieve our expected market growth, the second quarter results demonstrate the combined earnings value of our four diversified, yet integrated, business units," Roberts said in a news release. Roberts pointed to driver shortages and delays in rail delivery as potential "headwinds" for the remainder of 2014.
Intermodal load growth was up 8 percent, helping the segment improve its revenue to $931 million in the quarter. Profit in the segment was reported at $113.4 million, up 2 percent despite what the company described as "slower rail velocity and continuing service disruptions."
Revenue from dedicated contract services increased 15 percent to $348 million. Operating income improved 2 percent to $30.3 million. Driver recruiting costs and wages that rose faster than hauling prices stymied additional growth, the company said.
No division saw a bigger quarterly jump than the company's brokerage segment, which reported $173 million in revenue -- a 31 percent increase over the same quarter last year. Division profit was $6.2 million, a jump of 50 percent. J.B. Hunt pointed to strong execution of its branch growth strategy in helping improve the division's performance.
Revenue from trucking was $101 million, flat compared with last year's numbers. Despite no growth in trucking revenue, Roberts said he was happy with the division's results, which include a 217 percent jump in profits to $9.4 million.
"The planned improvement in JBT [the trucking division] is ahead of schedule and though there is more to do, we are extremely pleased with the progress thus far," Roberts said.
Rate increases helped the trucking segment grow, despite a smaller fleet. J.B. Hunt reported an 8 percent reduction in fleet size compared with the same period last year. It had 1,860 trucks operating in the quarter, compared with 2,018 in 2013.
"Trucks are being utilized to a greater degree, and they're getting betting pricing," Stephens Inc. analyst Brad Delco said. "Revenue per loaded mile is up 10 percent and they had a shorter length of haul, which means higher rates per mile."
Delco pointed to J.B. Hunt's 6 percent improvement in operating margins as another sign of its strong performance. That improvement included the $2.2 million sale of equipment and, even excluding that factor, the company still saw its operating margins improve by 4.2 percent, which Delco called "a pretty strong result."
Shares of J.B. Hunt ended Tuesday trading at $76.80, up $2.51 from Monday.
Business on 07/16/2014