J.B. Hunt Transport Services Inc.
), one of the largest U.S. truckload carriers, reported third
quarter 2013 earnings of 75 cents per share, missing the Zacks
Consensus Estimate of 78 cents. Earnings per share grew 15.4%
from 65 cents earned in the year-ago quarter.
Total revenue increased 10.8% year over year to $1,436 million
but fell short of the Zacks Consensus Estimate of $1,446 million.
Operating income for the quarter increased 13.3% year over year
to $151 million primarily driven by load growth, higher
intermodal box turns and freight mix. The company also registered
lower interest expense thanks to lower interest rates.
reported quarterly revenues of $890 million, up 12.1% year over
year on an 11.6% increase in load count. Increase in freight
price and fuel surcharges along with a better traffic mix also
aided revenue growth. The average tractor count increased to
4,033 from 3,522 in the year-ago quarter. Operating income
climbed 20.5% year over year to $118.0 million.
Dedicated Contract Services
revenues grew 17% year over year to $318.9 million in the third
quarter. The average truck count was 6,099 against 5,153 in the
year-ago quarter. Operating income improved 14.3% year over year
to $29.2 million buoyed by increase in sales from new accounts,
which was partially offset by higher recruiting, relocation and
employee retention costs mostly within the new fleet conversion.
revenues dropped 17.0% year over year to $96.9 million. The
average tractor count reduced to 1,989 from 2,406 in the year-ago
quarter. Rates from shippers registered a year-over-year decline
of 0.4%. The average length of haul decreased 6.1%. Operating
income saw a sharp drop of 83.8% year over year to $0.6
The decline was mainly due to lower asset utilization, higher
wages per mile for drivers, higher independent contractor costs
and higher maintenance cost per unit. These headwinds ultimately
offset the positive impact of favorable changes in lowering the
size of the trailer fleet, fewer empty miles and reduction in
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Integrated Capacity Solutions
revenues grew 13.3% year over year to $137.4 million attributable
to a 4.3% increase in load volume and higher pricing. Operating
income decreased 48.3% year over year to $2.8 million due to a
decline in gross profit margin and increased personnel expenses.
On a year-over-year basis, the carrier base rose 8% and employee
count grew 14.5%.
At the end of the third quarter, cash and cash equivalents
increased to $5.9 million from $5.6 million at year-end 2012.
Total debt was $687 million compared with $685.0 million at the
end of 2012.
Capital expenditures for the first nine months of 2013 were
$333.6 million against $279.0 million at the end of the
comparable period of last year.
As of Sep 30, 2013, the company had approximately $388 million
worth of shares remaining under its repurchase authorization.
Looking ahead, we expect the company to reap benefits from its
unique intermodal network and secular growth of the dedicated
business segment. J.B. Hunt enjoys a leading market position, and
operates with high-class systems and advance technologies. We
also appreciate the company's efforts to expand its brand to
unexplored territories. However, a competitive scenario, higher
staff retention costs and a deteriorating truck business limit
its upside potential.
J.B. Hunt currently carries a Zacks Rank #3 (Buy). However, other
stocks to consider within same sector are
P.A.M Transportation Services Inc.
Covenant Transportation Group Inc.
Trinity Industries Inc.
). All these carry a Zacks Rank #2 (Buy).