J.B. Hunt Transport Services
), one of the largest U.S. truckload carriers, reported first
quarter 2013 earnings of 61 cents per share, missing the Zacks
Consensus Estimate of 64 cents. Earnings per share rose 7% from
57 cents earned in the year-ago quarter on strong growth across
Total revenue increased 10.8% year over year to $1.29 billion,
beating the Zacks Consensus Estimate of $1.28 billion.
Significant volume growth in Intermodal and Integrated Capacity
Solutions aided the growth in segmental revenues.
Operating income for the quarter increased 7.2% year over year to
$125 million primarily driven by strong profits in Intermodal and
Integrated Capacity Solutions operating income on higher load
count and cost benefits. The company also registered lower
interest expense given lower debt levels. However, these
positives were partially offset by higher employee, equipment,
claims and contract implementation costs as well as lower asset
reported quarterly revenues of $796 million, up 15% year over
year driven by a 13% increase in load count. Higher volume,
freight pricing and fuel surcharges along with a better freight
mix aided revenue growth in this segment. The average tractor
count increased to 3,712 from 3,255 in the year-ago quarter.
Operating income climbed 22% year over year to $96.8 million.
Dedicated Contract Services
revenues grew 9% year over year to $279.0 million in the first
quarter. The average truck count was 5,495 against 4,862 in the
year-ago quarter. However, operating income plunged 22% year over
year to $21.9 million due to higher equipment and maintenance
costs, lower gains on equipment sales as well as rise in bad debt
expense and contract implementation costs.
revenues dropped 21.0% year over year to $102 million. The
average tractor count reduced to 2,011 from 2,561 in the year-ago
quarter. However, rates continued to improve and registered a
year-over-year growth of 0.5% in the quarter. The average length
of haul declined 9.8%. Operating income saw a sharp drop of 78%
year over year to $1.1 million. The decline was mainly due to
increases in independent carrier costs, compensation, maintenance
and equipment costs and lower gains on equipment sales.
Integrated Capacity Solutions
revenues grew 26.0% year over year to $122 million attributable
to a 47% increase in load volume and higher pricing, mostly on
transactional businesses. Operating income increased 27% year
over year to $5.2 million. On a year-over-year basis, the carrier
base rose 9% and employee count grew 16%.
At the end of the first quarter, cash and cash equivalents
increased to $5.7 million from $5.6 million in year-end 2012.
Total debt was $593 million compared with $685.0 million at the
end of 2012.
First quarter capital expenditures were $115 million compared
with $84 million at the end of the year-ago quarter.
As of Mar 31, 2013, the company had approximately $453 million
worth of shares remaining under its repurchase authorization.
Management did not buyback shares in the first quarter of the
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 take its brand to
unexplored territories. With these positives well reflected in
the stock price, we see upside potential of the company at the
CON-WAY INC (CNW): Free Stock Analysis Report
HUNT (JB) TRANS (JBHT): Free Stock Analysis
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J.B. Hunt competes with the likes of
Old Dominion Freight Line Inc.
YRC Worldwide Inc.
). Presently, the company a Zacks Rank #2 (Buy).