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Why Is JB Hunt (JBHT) Up 1.7% Since Last Earnings Report?
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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 1.7% in that time frame, underperforming 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 Miss at J.B. Hunt in Q4
J.B. Hunt Transport Services’s fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
Total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
The quarterly operating income (on a reported basis) fell 12.6% to $281.95 million, owing to an unfavorable impact of $64 million pre-tax increase in casualty claim expense.
Operating expenses escalated 6.1% to $3.37 billion.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.75 billion, up 11% year over year owing to 12% increase in revenue per load resulting from changes in mix of freight, customer rates, and fuel surcharge revenue. Volumes decreased 1% year over year. While Eastern network loads increased 8%, transcontinental loads fell 7%. Operating income fell 8% to $179.5 million owing to lower volume, higher investments to attract and retain professional drivers, office personnel, and maintenance technicians; and higher insurance costs.
Dedicated Contract Services segment revenues rose 24% from the year-ago period to $880 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 1,210 more revenue-producing trucks (on a net basis) versus a year ago. Operating income increased 4% to $75.8 million.
Integrated Capacity Solutions revenues decreased 33% year over year to $496 million. While segmental volumes decreased 27% and truckload volumes declined 21%. Revenue per load fell 9%, due to changes in customer freight mix and lower contractual and transactional rates in the company’s truckload business. JBHT reported operating loss of $2.9 million compared with an operating income of $21.2 million in the year-ago quarter.
Truckload revenues soared 6% to $276 million. Excluding fuel surcharge revenues, segmental revenues fell 2% year over year owing to 8% decline in revenue per load excluding fuel surcharge revenue partially offset by a 6% increase in load volume. At the end of the fourth quarter, total tractors and trailers were 2,718 and 14,718, respectively, compared with the year-ago quarter’s figures of 2,235 and 11,172. The Truckload operating income declined 35% year over year to $16.9 million.
Final Mile Services revenues ascended 15% year over year to $255 million due to the addition of multiple customer contracts over the last year and benefits from the acquisition of Zenith Freight Lines. The segment’s operating income was $12.6 million in the reported quarter up 70% year over year.
Liquidity & Buyback
J.B. Hunt exited the fourth quarter with cash and cash equivalents of $51.93 million compared with $84.33 million at the end of September 2022. Long-term debt was $1,261.73 million compared with $1,243.81 million at September-end.
Net capital expenditures for the fourth quarter were $413.87 million compared with $365.94 million in the year-ago period.
During the reported quarter, J.B. Hunt did not repurchase any shares. The trucking company had approximately $551 million remaining under its share repurchase authorization at the end of the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, JB Hunt has a strong 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 top 40% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JB Hunt has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is JB Hunt (JBHT) Up 1.7% Since Last Earnings Report?
It has been about a month since the last earnings report for JB Hunt (JBHT - Free Report) . Shares have added about 1.7% in that time frame, underperforming 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 Miss at J.B. Hunt in Q4
J.B. Hunt Transport Services’s fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
Total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
The quarterly operating income (on a reported basis) fell 12.6% to $281.95 million, owing to an unfavorable impact of $64 million pre-tax increase in casualty claim expense.
Operating expenses escalated 6.1% to $3.37 billion.
Segmental Highlights
Intermodal division generated quarterly revenues of $1.75 billion, up 11% year over year owing to 12% increase in revenue per load resulting from changes in mix of freight, customer rates, and fuel surcharge revenue. Volumes decreased 1% year over year. While Eastern network loads increased 8%, transcontinental loads fell 7%. Operating income fell 8% to $179.5 million owing to lower volume, higher investments to attract and retain professional drivers, office personnel, and maintenance technicians; and higher insurance costs.
Dedicated Contract Services segment revenues rose 24% from the year-ago period to $880 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 1,210 more revenue-producing trucks (on a net basis) versus a year ago. Operating income increased 4% to $75.8 million.
Integrated Capacity Solutions revenues decreased 33% year over year to $496 million. While segmental volumes decreased 27% and truckload volumes declined 21%. Revenue per load fell 9%, due to changes in customer freight mix and lower contractual and transactional rates in the company’s truckload business. JBHT reported operating loss of $2.9 million compared with an operating income of $21.2 million in the year-ago quarter.
Truckload revenues soared 6% to $276 million. Excluding fuel surcharge revenues, segmental revenues fell 2% year over year owing to 8% decline in revenue per load excluding fuel surcharge revenue partially offset by a 6% increase in load volume. At the end of the fourth quarter, total tractors and trailers were 2,718 and 14,718, respectively, compared with the year-ago quarter’s figures of 2,235 and 11,172. The Truckload operating income declined 35% year over year to $16.9 million.
Final Mile Services revenues ascended 15% year over year to $255 million due to the addition of multiple customer contracts over the last year and benefits from the acquisition of Zenith Freight Lines. The segment’s operating income was $12.6 million in the reported quarter up 70% year over year.
Liquidity & Buyback
J.B. Hunt exited the fourth quarter with cash and cash equivalents of $51.93 million compared with $84.33 million at the end of September 2022. Long-term debt was $1,261.73 million compared with $1,243.81 million at September-end.
Net capital expenditures for the fourth quarter were $413.87 million compared with $365.94 million in the year-ago period.
During the reported quarter, J.B. Hunt did not repurchase any shares. The trucking company had approximately $551 million remaining under its share repurchase authorization at the end of the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, JB Hunt has a strong 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 top 40% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JB Hunt has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.