J.B. Hunt profits fall but beat estimate

A view of the break area inside the new expansion Thursday, July 6, 2017, at the J.B. Hunt Transport headquarters in Lowell.
A view of the break area inside the new expansion Thursday, July 6, 2017, at the J.B. Hunt Transport headquarters in Lowell.

J.B. Hunt Transport Services Inc.'s second quarter results beat expectations, despite a one-time settlement charge.

The Lowell-based transportation company posted net earnings of $133.6 million, a 12% drop from last year's $151.7 million.

During a time of rate and revenue-producing truck gains, the company said profits slid year over year because of higher driver wages and operational costs, including a one-time $20 million settlement charge worth 14 cents per share.

Revenue, including fuel surcharges, grew to $2.26 billion in the three months ending June 30, up from $2.14 billion.

Analysts had predicted J.B. Hunt would post earnings of roughly $1.34 per share, one cent lower than last year's quarter, according to a FactSet consensus estimate. Instead, the carrier posted earnings per share of $1.23. Without the one-time charge, earnings per share was an adjusted $1.37, beating Wall Street's and Stephens Inc.'s estimates, a research brief shows.

"Results were better than feared," said Stephens analyst Justin Long. All of the company's segments, except for logistics, beat Stephens' estimates. By segment: intermodal was 3 cents higher; dedicated was 7 cents higher; truckload was 1 cent higher, according to a research brief, and logistics was 6 cents lower than expected.

Long had predicted a weaker quarter compared to last year's because of flooding in the Midwest, a rush to complete freight shipments ahead of tariff deadlines and an overall softer-than-expected demand this Spring.

J.B. Hunt's intermodal, or freight, segment reported revenue of $1.1 billion and operating income of $124 million, outperforming its other segments for the quarter. It's dedicated, or fleet, segment reported revenue of $690 million and operating income of $60 million. It's truckload segment reported revenue of $99 million and operating income of $8.9 million. And it's integrated, or logistics, segment reported revenue of $334 million and an operating loss of $570,000.

The $20 million pre-tax charge used to settle a final mile claim was reflected in the company's dedicated segment.

Executives discussed the quarter's results in a conference call after market hours on Monday. A replay was to be made available on the company's investor website.

J.B. Hunt repurchased almost 2 million shares of common stock during the second quarter, worth $190 million. On June 30, the company said it had about $181 million remaining under its "share repurchase authorization," and 106.8 million actual shares outstanding.

Hunt shares fell 36 cents, or 0.4%, to close Monday at $92.58 before the earnings report was released. The shares have traded as high as $129.98 the past 52 weeks and as low as $83.64. The shares rose as much as 7% in after-hours trading.

Business on 07/16/2019

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