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What's in Store for J.B. Hunt (JBHT) Stock in Q2 Earnings?

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J.B. Hunt Transport Services, Inc. (JBHT - Free Report) is scheduled to report second-quarter 2020 results on Jul 16, after market close.

The Zacks Consensus Estimate for second-quarter earnings has been revised 1.2% downward to 84 cents in the past 60 days. Moreover, the company has a disappointing earnings history, having surpassed the Zacks Consensus Estimate in only one of the last four quarters (misses in the rest).

Let’s discuss the factors that might have had an impact on J.B. Hunt’s June end-quarter performance.

Thanks to the COVID-19 outbreak, persistent sluggishness in the freight environment is likely to have affected intermodal volumes. Soft volumes due to supply chain disruptions might have had a negative impact on trucking revenues. Evidently, the Zacks Consensus Estimate for revenues in the Truck segment indicates 8% decline from the year-ago quarter’s reported figure.

Moreover, escalating operating expenses due to high wages for drivers and increased rail purchased transportation costs are expected to have affected J.B. Hunt’s bottom line.

Besides, Final Mile Services (FMS) division is expected to have experienced major setback during the second quarter with customers temporarily closing operations due to the pandemic. The consensus mark for operating revenue per load, excluding fuel surcharge revenues, suggests a fall of 13.5% sequentially.

Nevertheless, the company's DCS segment is expected to have performed impressively, aiding its top line during the second quarter. The Zacks Consensus Estimate for revenues in the DCS segment indicates a 22.7% increase from the March end reported figure.

In response to social distancing norms, online shopping space is growing leaps and bounds. Evidently, rapid expansion of the company’s Final Mile network (delivery of goods to customer’s doorstep) is expected to have outweighed traditional freight. This tailwind is expected to have driven J.B. Hunts’ top line in the quarter to be reported.

Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for J.B. Hunt this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: J.B. Hunt has an Earnings ESP of -2.09% as the Most Accurate Estimate is pegged at 82 cents, lower than the Zacks Consensus Estimate of 84 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt carries a Zacks Rank #3.

Highlights of Q1 Earnings

J.B. Hunt's first-quarter 2020 earnings of 98 cents per share missed the Zacks Consensus Estimate of $1.04. The bottom line also declined 10.1% year over year. However, total operating revenues of $2,280.8 million surpassed the Zacks Consensus Estimate of $2,215.9 million and also increased 9% year over year, benefiting from impressive performances across all the segments.

Stocks to Consider

Investors interested in the broader Transportation sector may consider United Airlines Holdings, Inc. (UAL - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Air Lease Corporation (AL - Free Report) . These stocks possess the right combination of elements to beat on earnings this reporting cycle.

United Airlines has an Earnings ESP of +18.35% and a Zacks Rank of 3. The company will release its second-quarter 2020 results on Jul 22.

Southwest Airlines has an Earnings ESP of +17.06% and a Zacks Rank of 3. The company will release its second-quarter 2020 results on Jul 23.

Air Lease has an Earnings ESP of +23.32% and a Zacks Rank of 3. The company will release its second-quarter 2020 results on Aug 6.

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