J.B. Hunt Transport Services
(
JBHT
), one of the largest U.S. truckload carriers, reported first
quarter 2012 earnings of 57 cents per share, which surpassed the
Zacks Consensus Estimate of 52 cents. Earnings per share soared
42.5% from 40 cents earned in the year-ago quarter on strong growth
across most segments.
Total revenue increased 16.5% year over year to $1.17 billion,
beating the Zacks Consensus Estimate of $1.15 billion. The
year-over-year growth was aided by higher shipment in each of the
segments alongside continued growth in fuel surcharges. Operating
income leaped 29.8% year over year to $116.6 million attributable
to strong profits in three segments -- Intermodal, Dedicated
Contract Services and Integrated Capacity Solutions.
Segment Results
Intermodal
reported revenue of $694.3 million, up 20% year over year, driven
by a 16% increase in load count. The growth was aided by an
increase in fuel surcharges and capacity constraints in the truck
market. Pricing grew 3.0% year over year. The average tractor count
increased to 3,255 from 2,736 in the year-ago quarter. Operating
income climbed 27% year over year to $79.4 million
Dedicated Contract Services
revenues grew 7% year over year to $255.9 million in the first
quarter. The average truck count was 4,881 against 4,652 in the
year-ago quarter. Operating income shot up 51% year over year to
$28.1 million on effective cost control measures, increased asset
utilization and productivity gains.
Truck
revenues climbed 8.0% year over year to $128.2 million. The average
tractor count grew to 2,615 from 2,550 in the year-ago quarter
given the increased number of private contractors. Rates continued
to improve and registered year-over-year growth of 2.6% in the
quarter. The average length of haul declined 6.6%. Operating income
decreased 16% year over year to $4.9
million.
Integrated Capacity Solutions
revenues grew 30.0% year over year to $97.0 million attributable to
a 14% increase in load volume and higher pricing, mostly on
transactional businesses as well as an increase in fuel surcharges.
Operating income shot up 58% year over year to $4.1 million. On a
year-over-year basis, the carrier base rose 14.0% and employee
count grew 14.5%.
Liquidity
At the end of the first quarter, cash and cash equivalents
increased to $5.7 billion from $5.5 billion in year-end 2011. Total
debt was $702 million compared with $749.0 million at the end of
2011.
First quarter capital expenditures were $84 million compared
with $112 million at the end of the year-ago quarter.
Share Repurchase
At the end of the first quarter, the company has a total share
repurchase authorization of $503 million.
Our Analysis
We believe J.B. Hunt continues to gain market share across all
segments, particularly in Intermodal, Dedicated Contract Services
and Integrated Capacity Solutions that delivered strong results.
Further, effective cost control and continued freight rate gains
also remain encouraging.
However, the company faces intense competition from other
truckload carriers such as
YRC Worldwide Inc.
(
YRCW
),
Old Dominion Freight Line Inc.
(
ODFL
) and
Conway Inc.
(
CNW
) due to its low barriers to entry. Additionally, rapidly rising
fuel costs and tightening of capacity in the Truck market amid
truck load conversion to rail intermodal may affect the company's
performance ahead.
Consequently, we are maintaining our long-term Neutral
recommendation on J.B. Hunt. For the short term, the company holds
a Zacks Rank # 2 Rank (Buy).
CON-WAY INC (
CNW
): Free Stock Analysis Report
HUNT (JB) TRANS (
JBHT
): Free Stock Analysis Report
OLD DOMINION FL (
ODFL
): Free Stock Analysis Report
YRC WORLDWD INC (
YRCW
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research