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JB Hunt (JBHT) Up 9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for JB Hunt (JBHT - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JB Hunt due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at J.B. Hunt in Q2
J.B. Hunt’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.
Total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. Total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
Quarterly operating income (on a reported basis) climbed 46.2% to $353.08 million due to higher volumes, customer rate and cost recovery efforts. Operating expenses escalated 30.6% to $3.48 billion.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.83 billion, up 42% year over year. Revenue per load climbed 32% in the quarter under discussion. Volumes increased 8% year over year. While Eastern network loads increased 13%, transcontinental loads rose 5%. Despite strong demand, volumes were affected by network inefficiencies and container utilization challenges due to rail velocity and customer behavior. Operating income soared 50% year over year to $202.5 million, driven by an increase in volume, customer rate and cost-recovery efforts.
Dedicated Contract Services segment revenues rose 39% from the year-ago period to $863 million, owing to fleet productivity improvement and an increase in average revenue-producing trucks. The company’s fleet, at the end of the quarter, had 2,122 more revenue-producing trucks (on a net basis) versus a year ago. Operating income increased 13% to $89.2 million.
Integrated Capacity Solutions revenues increased 3% year over year to $623 million. Both segmental volumes and truckload volumes declined 3%. Revenue per load climbed 5%, owing to higher contractual rates in the truckload business and changes in customer freight mix. The segment’s operating income was $23.6 million in the reported quarter compared with $3.1 million in the second quarter of 2021.
Final Mile Services revenues ascended 21% year over year to $257 million due to the addition of multiple customer contracts over the last year and benefits from the acquisition of Zenith Freight Lines, which closed in February end. The segment’s operating income increased 20% to $12.8 million, owing to an improvement in revenue quality.
Truckload revenues soared 46% to $269 million. Excluding fuel surcharge revenues, segmental revenues rose 37% year over year due to 20% increase in revenue per load (excluding fuel surcharge revenue) and 14% rise in load count. At the end of the second quarter, total tractors and trailers were 2,623 and 12,770, respectively, compared with the year-ago quarter’s figures of 1,770 and 8,958.Truckload operating income grew76% to $25 million on increased load counts and revenue per load.
Liquidity & Buyback
J.B. Hunt exited the second quarter with cash and cash equivalents of $123.84 million compared with $144.53 million at the end of March 2022. Long-term debt was $945.99 million compared with $945.63 million at March end. Net capital expenditures for the first quarter were $308.97 million compared with $174.86 million in the year-ago period.
During the reported quarter, J.B. Hunt repurchased around 979,000 shares for approximately $164 million. The trucking company had approximately $112 million remaining under its share repurchase authorization at the end of the second quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, JB Hunt has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise JB Hunt has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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JB Hunt (JBHT) Up 9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for JB Hunt (JBHT - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JB Hunt due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at J.B. Hunt in Q2
J.B. Hunt’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.
Total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. Total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
Quarterly operating income (on a reported basis) climbed 46.2% to $353.08 million due to higher volumes, customer rate and cost recovery efforts. Operating expenses escalated 30.6% to $3.48 billion.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.83 billion, up 42% year over year. Revenue per load climbed 32% in the quarter under discussion. Volumes increased 8% year over year. While Eastern network loads increased 13%, transcontinental loads rose 5%. Despite strong demand, volumes were affected by network inefficiencies and container utilization challenges due to rail velocity and customer behavior. Operating income soared 50% year over year to $202.5 million, driven by an increase in volume, customer rate and cost-recovery efforts.
Dedicated Contract Services segment revenues rose 39% from the year-ago period to $863 million, owing to fleet productivity improvement and an increase in average revenue-producing trucks. The company’s fleet, at the end of the quarter, had 2,122 more revenue-producing trucks (on a net basis) versus a year ago. Operating income increased 13% to $89.2 million.
Integrated Capacity Solutions revenues increased 3% year over year to $623 million. Both segmental volumes and truckload volumes declined 3%. Revenue per load climbed 5%, owing to higher contractual rates in the truckload business and changes in customer freight mix. The segment’s operating income was $23.6 million in the reported quarter compared with $3.1 million in the second quarter of 2021.
Final Mile Services revenues ascended 21% year over year to $257 million due to the addition of multiple customer contracts over the last year and benefits from the acquisition of Zenith Freight Lines, which closed in February end. The segment’s operating income increased 20% to $12.8 million, owing to an improvement in revenue quality.
Truckload revenues soared 46% to $269 million. Excluding fuel surcharge revenues, segmental revenues rose 37% year over year due to 20% increase in revenue per load (excluding fuel surcharge revenue) and 14% rise in load count. At the end of the second quarter, total tractors and trailers were 2,623 and 12,770, respectively, compared with the year-ago quarter’s figures of 1,770 and 8,958.Truckload operating income grew76% to $25 million on increased load counts and revenue per load.
Liquidity & Buyback
J.B. Hunt exited the second quarter with cash and cash equivalents of $123.84 million compared with $144.53 million at the end of March 2022. Long-term debt was $945.99 million compared with $945.63 million at March end. Net capital expenditures for the first quarter were $308.97 million compared with $174.86 million in the year-ago period.
During the reported quarter, J.B. Hunt repurchased around 979,000 shares for approximately $164 million. The trucking company had approximately $112 million remaining under its share repurchase authorization at the end of the second quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, JB Hunt has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise JB Hunt has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.