Hub Group reported first-quarter earnings per share of $1.88, 5 cents better than the analyst estimate of $1.83. But revenue for the quarter came in at $1.2 billion, versus the consensus estimate of $1.23 billion.
“The market has shifted from this time last year, capacity is loose, customers are more fluid, rail services are improving, inventories are elevated, import volumes are down and the employment market has become more balanced,” Phil Yeager, Hub Group’s president and CEO, said during an earnings call Thursday. “However, given slower import demand and elevated inventories, as well as a more aggressive pricing environment, volumes have underperformed our expectations.”
Oak Brook, Illinois-based Hub Group (NASDAQ: HUBG) is a provider of transportation and logistics management solutions.
The company’s first-quarter revenue of $1.2 billion was an 8% y/y decrease compared with $1.3 billion during the same year-ago quarter.
Intermodal volume saw a 12% decline in the local West and a decline of 17% in the local East, according to COO Brian Alexander.
Beginning with the first quarter of 2023, Hub Group made changes to its reportable segments, grouping asset-light business lines, intermodal and dedicated trucking in its intermodal and transportation solutions (ITS).
Hub Group’s logistics segment will now include managed transportation, truck brokerage, final mile, consolidation, and warehousing and fulfillment.
Hub Group’s ITS revenue fell 9% y/y to $709 million, with revenue per load for the quarter increasing 3%, while volume decreased 12% as compared to the prior year.
The company’s logistics segment revenue was $469 million, as compared to $541 million in the prior year, a 13% y/y decline. The decrease in revenue was driven by lower revenue per load in Hub Group’s brokerage business line and lower managed transportation business line revenue.
Hub Group sees earnings per share of $6 to $7 for fiscal year 2023. The company also sees fiscal year 2023 revenue of $4.6 billion to $4.8 billion.
Yeager said the company expects a stronger second half of 2023 “as bid awards are realized.”
“We anticipate improved volumes, velocity and network balance, which will help offset lower pricing and fees,” he said.
Hub GroupQ1/23Q1/22Y/Y % ChangeRevenue:$1.15B$1.3B(8%)Intermodal and transportation solutions$709M$777M(9%)Logistics$469M$541M(13%)EPS$1.88$2.58(27%)Hub Group Q1 earnings. $ in millions, except EPS.
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