J.B. Hunt Rolls Past Q3 Expectations

J.B. Hunt Transport Services handily beat third-quarter estimates Friday, posting earnings per share of $1.88, 11 cents ahead of consensus expectations. Earnings per share were 27 cents higher than the second quarter and 70 cents better than the year-ago quarter.

Supply chains headwinds and network congestion on the railroads limited J.B. Hunt's JBHT intermodal volume growth. Loads were off 6% year-over-year but a 24% increase in revenue per load pushed the top line 17% higher in the quarter to $1.41 billion.

"Demand for intermodal capacity remains strong, however, volumes in the quarter were negatively impacted by a continuation of rail restrictions across the network and elevated detention of trailing equipment at customer facilities," the press release read.

The company pointed to a lack of workers as the primary culprit.

"We believe labor shortages across the industry in both rail and truck networks and at customer warehouses are at the core of the supply-chain fluidity challenges limiting our asset utilization and capacity," the report continued.

J.B. Hunt is in the process of adding some 12,000 containers to its fleet to alleviate the stress created by slow turn times on the rails and at customer facilities. The company added 2,853 units in the period to take the total fleet count to more than 102,000 boxes.

Dedicated revenue increased 20% year-over-year to $665 million. The average truck count increased 12% and revenue per truck was up 7%. However, margins slid in the period due to higher driver and non-driver compensation expenses. The division's operating ratio was 88.2%, 280 bps worse year-over-year.

The brokerage division posted an operating income of $15 million, a reversal of the $18 million loss booked in the third quarter of last year. The result was also well ahead of the $3 million profit it saw last quarter. Revenue was up 55% year-over-year to $666 million with loads only 4% higher. Revenue per load was up 48%.

Operating income in the final-mile segment was $1.3 million, 39% lower year-over-year and well off the more than $10 million recorded in the second quarter. Increased contract implementation expenses, higher purchased transportation costs, and lower volumes due to supply chain headwinds were the reasons.

The truckload division recorded a revenue increase of 87% year-over-year to $204 million. Revenue per loaded mile including fuel was up 38% to $3.70. Rates among J.B. Hunt's contractual customers increased approximately 29% year-over-year.

The company will host a call at 10 a.m. EDT Friday to discuss results with analysts. Stay tuned to FreightWaves for continuing coverage of J.B. Hunt's earnings announcement.

Table: J.B. Hunt's key performance indicators

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