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JB Hunt (JBHT) Down 0.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for JB Hunt (JBHT - Free Report) . Shares have lost about 0.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is JB Hunt due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Miss at J.B. Hunt in Q2
J.B. Hunt Transport Services' second-quarter 2024 earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
Total operating revenues of $2.93 billion 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.
Operating income for the reported quarter fell 24% year over year to $205.7 million. The downside was owing to lower revenues and higher insurance and claims, equipment-related, and certain personnel-related expenses.
Net interest expenses for the second quarter grew 38% year over year owing to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.41 billion, down 5% year over year. The downside was owing to the 1% decrease in volume and a 5% decrease in gross revenue per load, resulting from changes in customer rates, fuel surcharge revenue, and the mix of freight. Revenue per load, excluding fuel surcharge revenues, was down 4% year over year.
Transcontinental network loads increased 4% year over year, while eastern network loads decreased 7%.
Operating income fell 31% year over yearowing to lower yields and the underutilization of assets in the network.
Dedicated Contract Services segment revenues fell 4% from the year-ago period to $851 million, owing to a 1% decline in average trucks combined and a 3% decline in productivity (revenue per truck per week).
Operating income fell 15% year over yearowing to lower revenues, higher insurance and claims, equipment-related and bad debt expenses and higher new account start-up costs compared with the prior-year period. These were partially offset by lower maintenance costs and the maturing of new businesses onboarded over the past trailing 12 months.
Integrated Capacity Solutions revenues decreased 21% year over year to $270 million. Segmental volumes decreased 25%. Revenue per load increased 5% owing to increases in both contractual and transactional rates as well as changes in customer mix.
In the reported quarter, JBHT reported an operating loss of $13.3 million compared with an operating loss of $4.4 million in the second quarter of 2023. The increase in operating loss was backed by a $4.9 million decrease in gross profit, higher insurance and claims costs, and integration and transition costs related to the purchase of the brokerage assets of BNSF Logistics. These were partially offset by lower personnel-related expenses and reduced technology costs.
Truckload revenues fell 12% to $168 million. Excluding fuel surcharge revenues, segmental revenues fell13% due to a 4% decline in revenue per load excluding fuel surcharge revenue and a 9% decline in load volume.
At the reported-quarter end, total tractors and trailers were 1,933 and 13,306 compared with the year-ago quarter’s figures of 2,162 and 13,433, respectively.
Operating income fell 7% owing to the decline in revenue.
Final Mile Services revenues grew 5% year over year to $235 million due to multiple new contracts implemented over the past year. This was partially offset by ongoing efforts to improve revenue quality and profitability across various accounts which resulted in some loss of business, coupled with the general weakness in demand across some of the end markets served.
Operating income increased 33% year over yearowing to higher revenues and lower personnel, equipment-related, and bad debt expenses. These were partially offset by higher building maintenance expenses and loss on the sale of equipment compared with the prior-year period.
Liquidity & Buyback
J.B. Hunt exited the second quarter with cash and cash equivalents of $53.50 million compared with $64.18 million at the end of prior quarter. Long-term debt was $1.48 billion compared with $1.36 billion at the end of prior quarter.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -15.14% due to these changes.
VGM Scores
At this time, JB Hunt has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise JB Hunt has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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JB Hunt (JBHT) Down 0.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for JB Hunt (JBHT - Free Report) . Shares have lost about 0.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is JB Hunt due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Miss at J.B. Hunt in Q2
J.B. Hunt Transport Services' second-quarter 2024 earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
Total operating revenues of $2.93 billion 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.
Operating income for the reported quarter fell 24% year over year to $205.7 million. The downside was owing to lower revenues and higher insurance and claims, equipment-related, and certain personnel-related expenses.
Net interest expenses for the second quarter grew 38% year over year owing to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.41 billion, down 5% year over year. The downside was owing to the 1% decrease in volume and a 5% decrease in gross revenue per load, resulting from changes in customer rates, fuel surcharge revenue, and the mix of freight. Revenue per load, excluding fuel surcharge revenues, was down 4% year over year.
Transcontinental network loads increased 4% year over year, while eastern network loads decreased 7%.
Operating income fell 31% year over yearowing to lower yields and the underutilization of assets in the network.
Dedicated Contract Services segment revenues fell 4% from the year-ago period to $851 million, owing to a 1% decline in average trucks combined and a 3% decline in productivity (revenue per truck per week).
Operating income fell 15% year over yearowing to lower revenues, higher insurance and claims, equipment-related and bad debt expenses and higher new account start-up costs compared with the prior-year period. These were partially offset by lower maintenance costs and the maturing of new businesses onboarded over the past trailing 12 months.
Integrated Capacity Solutions revenues decreased 21% year over year to $270 million. Segmental volumes decreased 25%. Revenue per load increased 5% owing to increases in both contractual and transactional rates as well as changes in customer mix.
In the reported quarter, JBHT reported an operating loss of $13.3 million compared with an operating loss of $4.4 million in the second quarter of 2023. The increase in operating loss was backed by a $4.9 million decrease in gross profit, higher insurance and claims costs, and integration and transition costs related to the purchase of the brokerage assets of BNSF Logistics. These were partially offset by lower personnel-related expenses and reduced technology costs.
Truckload revenues fell 12% to $168 million. Excluding fuel surcharge revenues, segmental revenues fell13% due to a 4% decline in revenue per load excluding fuel surcharge revenue and a 9% decline in load volume.
At the reported-quarter end, total tractors and trailers were 1,933 and 13,306 compared with the year-ago quarter’s figures of 2,162 and 13,433, respectively.
Operating income fell 7% owing to the decline in revenue.
Final Mile Services revenues grew 5% year over year to $235 million due to multiple new contracts implemented over the past year. This was partially offset by ongoing efforts to improve revenue quality and profitability across various accounts which resulted in some loss of business, coupled with the general weakness in demand across some of the end markets served.
Operating income increased 33% year over yearowing to higher revenues and lower personnel, equipment-related, and bad debt expenses. These were partially offset by higher building maintenance expenses and loss on the sale of equipment compared with the prior-year period.
Liquidity & Buyback
J.B. Hunt exited the second quarter with cash and cash equivalents of $53.50 million compared with $64.18 million at the end of prior quarter. Long-term debt was $1.48 billion compared with $1.36 billion at the end of prior quarter.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -15.14% due to these changes.
VGM Scores
At this time, JB Hunt has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise JB Hunt has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.