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Will Rising Costs Dampen J.B. Hunt's (JBHT) Q4 Earnings?
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J.B. Hunt Transport Services Inc. (JBHT - Free Report) is slated to report fourth-quarter 2017 results on Jan 18.
Last quarter, the company delivered a negative earnings surprise of 5.2%. The transportation company’s earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents. The bottom line also declined 6.2% on a year-over-year basis due to higher operating expenses. Total operating revenues increased 9.1% year over year to $1,843.3 million and also surpassed the Zacks Consensus Estimate of $1,826.8 million.
Let’s see how things are shaping up this earnings season.
Factors at Play
High labor costs are likely to hurt the company's fourth-quarter results, ditto the previous quarter.
The company has provided a tepid outlook for the fourth quarter.
J.B. Hunt expects its fourth-quarter bottom line to vary between 98 cents and $1.03 per share excluding charges. The Zacks Consensus Estimate for the same in the to-be-reported period is pegged at the highest point of the guided range.
Revenues for the quarter to be reviewed are expected in the $1.9-$2.0 billion range. While the Zacks Consensus Estimate for the metric stands at the lowest point of this guided range.
Fourth-quarter operating income is estimated in the band of $145-$155 million.
Moreover, the company’s high leverage ratio may further affect results in the quarter.
However, volume growth at the company's primary division — intermodal — may buoy results in the soon-to-be-reported quarter.
Further, the Tax Cut and Jobs Act is likely to aid J.B. Hunt. The company expects the tax overhaul to result in a one-time benefit for 2017. Effective tax rate in the final quarter of 2017 is estimated at 37.6%.
Earnings Whispers
Our proven model does not conclusively show that J.B. Hunt is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP: J.B. Hunt has an Earnings ESP of -1.83%. This is because the Most Accurate estimate is pegged marginally lower at $1.01 per share than the Zacks Consensus Estimate of $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J.B. Hunt has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. Thus, a negative Earnings ESP in this case leaves the surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
J.B. Hunt Transport Services, Inc. Price and EPS Surprise
Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. (AAL - Free Report) , Spirit Airlines, Inc. (SAVE - Free Report) and JetBlue Airways Corporation (JBLU - Free Report) stocks with the right combination of elements to beat on earnings in their next releases this time around.
American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. The company will report fourth-quarter earnings on Jan 25.
Spirit Airlines has an Earnings ESP of +2.39% and is a Zacks #3 Ranked player. The company is scheduled to announce fourth-quarter earnings on Feb 6. You can seethe complete list of today’s Zacks #1 Rank stocks here.
JetBlue has an Earnings ESP of +1.40% and the stock is a #3 Ranked player. The company will release fourth-quarter earnings on Jan 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Will Rising Costs Dampen J.B. Hunt's (JBHT) Q4 Earnings?
J.B. Hunt Transport Services Inc. (JBHT - Free Report) is slated to report fourth-quarter 2017 results on Jan 18.
Last quarter, the company delivered a negative earnings surprise of 5.2%. The transportation company’s earnings of 91 cents per share missed the Zacks Consensus Estimate of 96 cents. The bottom line also declined 6.2% on a year-over-year basis due to higher operating expenses. Total operating revenues increased 9.1% year over year to $1,843.3 million and also surpassed the Zacks Consensus Estimate of $1,826.8 million.
Let’s see how things are shaping up this earnings season.
Factors at Play
High labor costs are likely to hurt the company's fourth-quarter results, ditto the previous quarter.
The company has provided a tepid outlook for the fourth quarter.
J.B. Hunt expects its fourth-quarter bottom line to vary between 98 cents and $1.03 per share excluding charges. The Zacks Consensus Estimate for the same in the to-be-reported period is pegged at the highest point of the guided range.
Revenues for the quarter to be reviewed are expected in the $1.9-$2.0 billion range. While the Zacks Consensus Estimate for the metric stands at the lowest point of this guided range.
Fourth-quarter operating income is estimated in the band of $145-$155 million.
Moreover, the company’s high leverage ratio may further affect results in the quarter.
However, volume growth at the company's primary division — intermodal — may buoy results in the soon-to-be-reported quarter.
Further, the Tax Cut and Jobs Act is likely to aid J.B. Hunt. The company expects the tax overhaul to result in a one-time benefit for 2017. Effective tax rate in the final quarter of 2017 is estimated at 37.6%.
Earnings Whispers
Our proven model does not conclusively show that J.B. Hunt is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.
Zacks ESP: J.B. Hunt has an Earnings ESP of -1.83%. This is because the Most Accurate estimate is pegged marginally lower at $1.01 per share than the Zacks Consensus Estimate of $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J.B. Hunt has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. Thus, a negative Earnings ESP in this case leaves the surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
J.B. Hunt Transport Services, Inc. Price and EPS Surprise
J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote
Stocks to Consider
Investors interested in the broader Transportation sector may consider American Airlines Group, Inc. (AAL - Free Report) , Spirit Airlines, Inc. (SAVE - Free Report) and JetBlue Airways Corporation (JBLU - Free Report) stocks with the right combination of elements to beat on earnings in their next releases this time around.
American Airlines has an Earnings ESP of +1.27% and a Zacks Rank of 3. The company will report fourth-quarter earnings on Jan 25.
Spirit Airlines has an Earnings ESP of +2.39% and is a Zacks #3 Ranked player. The company is scheduled to announce fourth-quarter earnings on Feb 6. You can see the complete list of today’s Zacks #1 Rank stocks here.
JetBlue has an Earnings ESP of +1.40% and the stock is a #3 Ranked player. The company will release fourth-quarter earnings on Jan 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>