J.B. Hunt Transport Services Inc. on Friday reported 2021 third-quarter net earnings of $199.8 million, a 59% increase from a year ago.
Revenue, including fuel surcharges, climbed 27% to $3.14 billion during the period.
In the three months that ended Sept. 30, the Lowell-based trucking and logistics firm saw double-digit revenue growth across all five of its major business segments compared with last year. It was profitable in all segments, but saw income growth in its truckload, intermodal and integrated capacity solutions segments.
Tontitown-based P.A.M. Transportation Services Inc. also posted a solid quarterly report, announcing net income of $21.4 million in the third quarter, more than triple the amount it made this time last year.
The solid quarterly reports came during a period of great disruption in the transportation industry as labor shortages coupled with increased demand and limited capacity have created backlogs and delays across the nation's supply chain that companies fear won't be solved in time for the holidays.
"We have no idea when the congestion will ease," John Roberts, J.B. Hunt's president and chief executive, said in a morning conference call with investors. Analysts questioned if this backdrop created by the pandemic should be considered the new normal. Roberts and other executives were optimistic about the future and the company's ability to adapt and grow.
"I'm super-proud of this team," Roberts said.
J.B. Hunt's truckload and integrated capacity solutions, or brokerage division, saw revenue growth of 87% and 55% year-over-year, respectively, as they were able to secure capacity for customers with digital platform J.B. Hunt 360. Intermodal, or rail, and dedicated contract services grew 17% and 20%, respectively, while final-mile services climbed 13%.
Total freight transactions in the marketplace for J.B. Hunt 360 surged to $518 million in the third quarter, up from $358 million the previous year, primarily from the brokerage division.
Operating income totaled $273.8 million versus $175.5 million in the third quarter of 2020. J.B. Hunt said profits climbed on customer rate and cost-recovery efforts as well as further implementation of its technology investments. In addition, the company cited higher productivity from its assets and people.
Challenges included rail-network congestion, wage increases and higher costs and expenses across the company.
Intermodal loads declined 6% versus last year. J.B. Hunt cited labor shortages in rail and truck networks and at customer warehouses for its supply chain issues. Pricing offset this as revenue per load increased 24% to $2,839. Revenue was $1.41 billion. Operating income rose 52% to $165.1 million this year over last.
Dedicated contract services logged revenue per truck per week of $4,692, a 7% increase from last year. Revenue was $665 million. Despite higher productivity, operating income declined 3% to $78.1 million because of increases in driver wages, recruiting costs and other business expenses. An additional 1,527 trucks were added to the fleet by the end of the quarter.
Integrated capacity solutions logged revenue per load of $1,960, a 48% increase from last year. This came from higher contractual and spot rates, resulting in revenue of $666 million. Gross profit margins increased to 12% versus 7% the previous year and were offset by higher personnel and technology costs. Operating income was $14.7 million compared with a loss of $18.3 million a year ago.
Final-mile services had fewer stops this year over last because of labor and supply chain constraints. Productivity, defined as revenue per stop, increased 17% because of a shift in customers and higher rates. Revenue was $206 million. Operating income decreased 39% this year over last from supply chain disruption, higher business and personnel costs and fewer volumes.
Truckload operations logged more miles and loads in the quarter compared with last year. Revenue per tractor per week increased 22% to $4,715. This came from technology innovations surrounding the J.B. Hunt 360 digital platform. The quarter ended with an additional 1,661 trailers and 252 trailers compared with the previous year.
Truckload revenue was $204 million. Operating income increased to $14.7 million compared with $2.9 million a year ago.
Analysts have been lowering projections in anticipation of the supply chain issues plaguing the world. Stephens analyst Justin Long said in a research brief Friday that J.B. Hunt's rail and brokerage segments had strong enough pricing to offset the declines in volumes.
Earnings per share of $1.88 beat Wall Street expectations by 10 cents, according to a FactSet consensus of analysts. Stephens expected $1.77.
"Overall, this looks like a solid quarter in a tough, capacity-constrained environment," Long said.
J.B. Hunt shares rose $15.31 to close Friday at $190.55 on the Nasdaq stock exchange.
P.A.M. HITS RECORD
Revenue for P.A.M. Transportation Services, including fuel surcharges, climbed 50% to $183 million, the company reported Thursday after the market closed.
A carrier for General Motors and other automakers, P.A.M. recorded a record quarter for revenue despite pressures from the struggling supply chain.
"We continued to see significant disruptions from some of out biggest customers in the third quarter and it accelerated quarter over quarter, but we are getting better at navigating the disruptions and that shows in our results this year," Joe Vitiritto, P.A.M. president, said in a statement. "We still have plenty of opportunity to continue to improve from here."
The company's truckload operations logged fewer miles than last year but that was offset by higher pricing from tighter capacity. Revenue per truck per workday was $902 compared to $692 the previous year.
The company's logistics operations recorded total revenue of $55.9 million compared with $26.9 million year-over-year.
During the quarter, P.A.M. completed a 2-for-1 stock split for its common stock that was paid out to stockholders Aug. 16. The company's outstanding stock doubled to 11,452,486 shares as a result.
P.A.M. also conducted a Dutch auction tender offer to purchase up to 200,000 shares of common stock. The company accepted a total of 272,405 shares at a purchase price of $37 per share. Payment was made during the quarter at a cost of $10.1 million.
At the end of the quarter, the company had $243.7 million outstanding in various forms of debt, a $53.7 million decrease from last year. It had $117.4 million in cash on hand and purchased 12,820 shares at a price of $39.21.
No analysts offered earnings estimates for P.A.M.'s third quarter, according to Yahoo! Finance.
P.A.M. shares surged more than 18%, or $8.42, to close Friday at $54.50 on the Nasdaq stock exchange.