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J. B. Hunt (JBHT) Hurt by Segmental Weakness and High Debt
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J.B. Hunt Transport Services, Inc.(JBHT - Free Report) continues to grapple with weakness across the majority of its business segments. JBHT reported second-quarter 2024 revenues of $2.93 billion, which missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year.
Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year. The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
Higher net interest expense is likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for the first half of 2024 increased 21.9% year over year due to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.
J.B. Hunt’s weak cash position is worrisome. JBHT's cash and cash equivalents stood at $53.50 million at the end of the second quarter of 2024, much lower than the long-term debt of $1.48 billion. This implies that the company does not have sufficient cash to meet its debt obligations.
JBHT has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in each of the last four quarters, delivering an average miss of 12.77%.
Partly due to these headwinds, shares of JBHT have plunged 15.5% so far this year compared with its industry’s loss of 3.3%.
Image Source: Zacks Investment Research
On the flip side, we are impressed by the company’s efforts to reward its shareholders through dividend payments and share repurchases. In the second quarter of 2024, JBHT purchased almost 1,225,000 shares for $203 million. As of Jun 30, 2024, JBHT had approximately $163 million remaining under its share repurchase authorization. Such shareholder-friendly moves instill investor confidence and positively impact the company's bottom line.
Declining operating expenses due to lower fuel costs, purchased transportation costs, and salaries, wages and benefits expenses, have the potential to boost J.B. Hunt's bottom line. During 2023, operating expenses fell 12.2% year over year. During the first half of 2024, operating expenses fell 5.8% year over year.
Zacks Rank and Stocks to Consider
J.B. Hunt currently carries a Zacks Rank #5 (Strong Sell).
WAB Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 11.83%.
The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 3.3% upward over the past 90 days. WAB has an expected earnings growth rate of 25.34% for 2024. Shares of WAB have gained 23.5% so far this year.
KEX has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 8.73%.
KEX has an expected earnings growth rate of 42.47% for 2024. The Zacks Consensus Estimate for KEX 2024 earnings has been revised 1.5% upward over the past 90 days. Shares of KEX have gained 44.9% so far this year.
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J. B. Hunt (JBHT) Hurt by Segmental Weakness and High Debt
J.B. Hunt Transport Services, Inc.(JBHT - Free Report) continues to grapple with weakness across the majority of its business segments. JBHT reported second-quarter 2024 revenues of $2.93 billion, which missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year.
Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year. The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
Higher net interest expense is likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for the first half of 2024 increased 21.9% year over year due to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.
J.B. Hunt’s weak cash position is worrisome. JBHT's cash and cash equivalents stood at $53.50 million at the end of the second quarter of 2024, much lower than the long-term debt of $1.48 billion. This implies that the company does not have sufficient cash to meet its debt obligations.
JBHT has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in each of the last four quarters, delivering an average miss of 12.77%.
Partly due to these headwinds, shares of JBHT have plunged 15.5% so far this year compared with its industry’s loss of 3.3%.
Image Source: Zacks Investment Research
On the flip side, we are impressed by the company’s efforts to reward its shareholders through dividend payments and share repurchases. In the second quarter of 2024, JBHT purchased almost 1,225,000 shares for $203 million. As of Jun 30, 2024, JBHT had approximately $163 million remaining under its share repurchase authorization. Such shareholder-friendly moves instill investor confidence and positively impact the company's bottom line.
Declining operating expenses due to lower fuel costs, purchased transportation costs, and salaries, wages and benefits expenses, have the potential to boost J.B. Hunt's bottom line. During 2023, operating expenses fell 12.2% year over year. During the first half of 2024, operating expenses fell 5.8% year over year.
Zacks Rank and Stocks to Consider
J.B. Hunt currently carries a Zacks Rank #5 (Strong Sell).
A couple of better-ranked stocks from the Zacks Transportation sector are Wabtec Corporation (WAB - Free Report) and Kirby Corporation (KEX - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
WAB Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 11.83%.
The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 3.3% upward over the past 90 days. WAB has an expected earnings growth rate of 25.34% for 2024. Shares of WAB have gained 23.5% so far this year.
KEX has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 8.73%.
KEX has an expected earnings growth rate of 42.47% for 2024. The Zacks Consensus Estimate for KEX 2024 earnings has been revised 1.5% upward over the past 90 days. Shares of KEX have gained 44.9% so far this year.