J.B. Hunt Transport Services missed first-quarter expectations Tuesday, reporting earnings per share of $1.22 compared to the consensus estimate of $1.53. A higher tax rate was a 7-cent headwind in the quarter.
Intermodal revenue fell 9% year over year (y/y) as revenue per load was off by a similar amount (down 5% from the fourth quarter). Total loads were flat y/y but 9% lower than in the fourth quarter. A 92.7% operating ratio (operating expenses as a percentage of revenue) was 370 basis points worse than the year-ago quarter.
Management called out “weaker than expected” demand and higher wages, equipment costs and insurance premiums as the culprits. Management said in February that bid season negotiations for its intermodal and truckload offerings were soft.
J.B. Hunt’s (NASDAQ: JBHT) brokerage unit reported a $17.5 million operating loss as loads declined 22% y/y, with revenue per load down just 5%. The unit lost $15 million in the fourth quarter. Higher insurance expenses and integration costs from the acquisition of BNSF Logistics’ (NYSE: BRK.B) brokerage operations were headwinds.
Dedicated revenue was off slightly y/y, the combination of fewer trucks in service and lower revenue per truck per week. An 89.1% OR was just 80 bps worse y/y.
The company’s truckload segment was barely profitable as loads and yields declined. The final-mile segment saw operating income more than double to $15.1 million as revenue per stop increased 10% y/y. The result included a $3.1 million claims benefit.
J.B. Hunt will host a call at 5 p.m. EDT on Tuesday to discuss first-quarter results.
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