J.B. Hunt Earnings Tumble on Falling Freight Rates

Date: Tuesday, October 19th, 2023
Source: The Wall Street Journal

J.B. Hunt Transport Services’ profit sank in the third quarter, sending a warning sign across a freight sector coping with slack demand and weak pricing.

The Lowell, Ark.-based shipping bellwether reported Tuesday that its profit tumbled more than 30% in the three months ended Sept. 30, hitting $187.4 million, or $1.80 a share, compared with $269.4 million, or $2.57 a share, a year earlier. Analysts polled by FactSet expected per-share earnings of $1.82.

Revenue fell 18% to $3.16 billion, missing the $3.17 billion expected by analysts polled by FactSet.

The revenue decline was led by steep retreats in revenue per load at J.B. Hunt’s intermodal and truckload segments, where declining pricing offset slight increases in shipping volumes.

Operating income in the intermodal business, which transports goods by truck and train and is J.B. Hunt’s largest business segment, fell 41% to $128 million. Freight volume edged up 1% in that segment, but revenue per load excluding fuel surcharges dropped 14% from the same period a year ago.

The company also saw a 38% drop in volumes in its freight brokerage integrated capacity solutions segment and a 20% drop in stops in its final miles services business.

J.B. Hunt’s results mark the first earnings report this fall in a trucking sector that has seen demand fall off this year as retailers have sought to pare back their inventories after overstocking during 2022. Many big companies have cut back on their orders during the typically busy season leading up to the holidays, citing weaker consumer demand for goods.

Cass Information Systems reported Tuesday in its monthly Cass Freight Index that freight rates across all U.S. domestic trucking and rail networks were down 20.4% in September from the same month last year. The freight payment company said truckload rates inched up 0.5% from August to September, however, which it said “may be a sight that truckload rates are nearing a bottom.”

J.B. Hunt shares fell 4% to $188.21 in after-hours trading Tuesday.

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