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J. B. Hunt (JBHT) Weighed Down by Weakness Across Segments
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J.B. Hunt Transport Services, Inc. (JBHT - Free Report) third-quarter 2023 revenues of $3,163.8 million lagged the Zacks Consensus Estimate of $3,224 million and fell 18% year over year. Total operating revenues, excluding fuel surcharges, decreased 15% year over year. The downfall was due to a decline in revenue per load of 14% in Intermodal, 22% in Truckload, a 38% decline in volume in Integrated Capacity Solutions, a 20% decrease in stops in Final Miles Services, and a 1% decline in average revenue producing trucks in Dedicated Contract Services.
Higher net interest expenses are likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for the first nine months of 2023 increased 7.7% year over year due to higher effective interest rates.
J.B. Hunt’s weak cash position is also worrisome. JBHT's cash and cash equivalents were $75.19 million at the third quarter of 2023-end, much lower than the long-term debt of $1,195.70 million.
Partly due to these headwinds, shares of JBHT, despite gaining 16.1%, have underperformed its industry’s growth of 39.6% so far this year.
Image Source: Zacks Investment Research
On the flip side, we are impressed by the company’s efforts to reward its shareholders through dividend payments and share repurchases. During the first nine months of 2023, JBHT purchased almost 765,000 shares for $135.0 million and paid dividends worth $130.54 million. As of Sep 30, 2023, JBHT had approximately $416 million remaining under its share repurchase authorization.
A decline in operating expenses due to lower fuel costs, purchased transportation costs, and salaries, wages and benefits expenses have the potential to boost J.B. Hunt's bottom line. During the first nine months of 2023, operating expenses fell 13.6% year over year.
Zacks Rank and Stocks to Consider
J.B. Hunt currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Transportation sector are Air Canada (ACDVF - Free Report) and Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) .
Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.
The service will commence in May 2024 as part of its expanded international summer 2024 flying schedule to cater to increased demand. The Zacks Consensus Estimate for Air Canada’s 2023 and 2024 earnings has witnessed increases of 32.6% and 41.3% in the past 60 days, respectively.
Wabtec has an expected earnings growth rate of 22.43% for the current year. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average. Wabtec presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 4.9% over the past 90 days. Shares of WAB have gained 26.1% year to date.
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J. B. Hunt (JBHT) Weighed Down by Weakness Across Segments
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) third-quarter 2023 revenues of $3,163.8 million lagged the Zacks Consensus Estimate of $3,224 million and fell 18% year over year. Total operating revenues, excluding fuel surcharges, decreased 15% year over year. The downfall was due to a decline in revenue per load of 14% in Intermodal, 22% in Truckload, a 38% decline in volume in Integrated Capacity Solutions, a 20% decrease in stops in Final Miles Services, and a 1% decline in average revenue producing trucks in Dedicated Contract Services.
Higher net interest expenses are likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for the first nine months of 2023 increased 7.7% year over year due to higher effective interest rates.
J.B. Hunt’s weak cash position is also worrisome. JBHT's cash and cash equivalents were $75.19 million at the third quarter of 2023-end, much lower than the long-term debt of $1,195.70 million.
Partly due to these headwinds, shares of JBHT, despite gaining 16.1%, have underperformed its industry’s growth of 39.6% so far this year.
Image Source: Zacks Investment Research
On the flip side, we are impressed by the company’s efforts to reward its shareholders through dividend payments and share repurchases. During the first nine months of 2023, JBHT purchased almost 765,000 shares for $135.0 million and paid dividends worth $130.54 million. As of Sep 30, 2023, JBHT had approximately $416 million remaining under its share repurchase authorization.
A decline in operating expenses due to lower fuel costs, purchased transportation costs, and salaries, wages and benefits expenses have the potential to boost J.B. Hunt's bottom line. During the first nine months of 2023, operating expenses fell 13.6% year over year.
Zacks Rank and Stocks to Consider
J.B. Hunt currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Transportation sector are Air Canada (ACDVF - Free Report) and Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) .
Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.
The service will commence in May 2024 as part of its expanded international summer 2024 flying schedule to cater to increased demand. The Zacks Consensus Estimate for Air Canada’s 2023 and 2024 earnings has witnessed increases of 32.6% and 41.3% in the past 60 days, respectively.
Wabtec has an expected earnings growth rate of 22.43% for the current year. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average. Wabtec presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 4.9% over the past 90 days. Shares of WAB have gained 26.1% year to date.