JBHT J B Hunt Transport Services Inc

• First Quarter 2024 Revenue: $2.94 billion; down 9%
• First Quarter 2024 Operating Income: $194.4 million; down 30%
• First Quarter 2024 EPS: $1.22 vs. $1.89; down 35%

J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced first quarter 2024 U.S. GAAP (United States Generally Accepted Accounting Principles) net earnings of $127.5 million, or diluted earnings per share of $1.22 versus first quarter 2023 net earnings of $197.8 million, or $1.89 per diluted share.

Total operating revenue for the current quarter was $2.94 billion compared with $3.23 billion for the first quarter 2023, a decrease of 9%. The decline in revenue was primarily driven by a 9% decrease in segment gross revenue per load in both Intermodal (JBI) and Truckload (JBT), 22% fewer loads in Integrated Capacity Solutions™ (ICS), and a modest decline in average trucks and productivity in Dedicated Contract Services® (DCS®) compared to the prior year period. Revenue declines in JBI, ICS, JBT and DCS were partially offset by Final Mile Services® (FMS) revenue growth of 2%, primarily driven by new contracts implemented over the past year. Current quarter total operating revenue, excluding fuel surcharge revenue, decreased approximately 7% versus the first quarter 2023.

Operating income for the current quarter decreased 30% to $194.4 million versus $277.5 million for the first quarter 2023. The decrease in operating income was primarily due to a combination of lower volumes and yield pressure in JBI, ICS and JBT, as well as increases in equipment, insurance and claims, and bad debt expense. Operating income as a percentage of gross revenue decreased year-over-year as a result of higher professional driver and non-driver wages and benefits, equipment, and insurance and claims expenses as a percentage of gross revenue. These items were partially offset by lower rail and truck purchased transportation costs as a percentage of gross revenue.

Net interest expense for the current quarter increased approximately 6% from first quarter 2023 due to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.

The effective income tax rate increased to 28.7% in the current quarter compared to 24.7% in the first quarter 2023, due to discrete tax items. We continue to expect our 2024 annual tax rate to be between 24.0% and 25.0%.

Segment Information:

Intermodal (JBI)

• First Quarter 2024 Segment Revenue: $1.40 billion; down 9%
• First Quarter 2024 Operating Income: $101.9 million; down 40%

Intermodal volume was flat versus the same period in 2023. Transcontinental network loads increased 5%, while eastern network loads decreased 7% compared to the first quarter 2023. Overall demand for our domestic intermodal service offering in the quarter was weaker than expected, partially attributable to competition from over-the-road truck options in the eastern network, and our disciplined approach to the market for the value our services provide. Segment gross revenue decreased 9% from the prior year period, driven by a 9% decrease in segment gross revenue per load, resulting from changes in the mix of freight, customer rates, and fuel surcharge revenue. Revenue per load excluding fuel surcharge revenue was down 8% year-over-year.

Operating income decreased 40% in the first quarter primarily from lower yields. JBI segment operating income as a percentage of segment gross revenue declined versus the prior-year period as a result of increases in professional driver and non-driver wages and benefits, higher equipment and maintenance expenses, and insurance premium costs as a percentage of gross revenue. During the period we onboarded approximately 1,140 new units of container capacity. The current period ended with approximately 119,300 units of trailing capacity and approximately 6,300 power units in the dray fleet.

Dedicated Contract Services (DCS)

• First Quarter 2024 Segment Revenue: $860 million; down 2%
• First Quarter 2024 Operating Income: $93.6 million; down 9%

DCS revenue decreased 2% during the current quarter over the same period 2023, driven by a 1% decline in average trucks combined with a 1% decline in productivity (gross revenue per truck per week). Productivity excluding fuel surcharge revenue increased 1% from a year ago driven by contracted indexed-based price escalators, partially offset by an increase in idled equipment. On a net basis, there were 71 fewer revenue producing trucks in the fleet by the end of the quarter compared to the prior-year period, and 2 more versus the end of the fourth quarter 2023. Customer retention rates are approximately 91%, largely reflecting the downsizing of fleets and to a lesser extent account losses.

Operating income decreased 9% from the prior year quarter. The decrease was primarily driven by lower revenue; increases in insurance premiums, equipment and bad debt expense; and higher new account start-up costs as compared to the prior year period. These items were partially offset by lower maintenance costs and the maturing of new business onboarded over the past trailing twelve months.

Integrated Capacity Solutions (ICS)

• First Quarter 2024 Segment Revenue: $285 million; down 26%
• First Quarter 2024 Operating Loss: $(17.5) million; vs. $(5.4) million in Q1’23

ICS revenue declined 26% during the current quarter versus the first quarter 2023. Overall segment volume decreased 22% versus the prior year period. Revenue per load decreased 5% compared to the first quarter 2023 due to lower contractual and transactional rates and changes in customer freight mix. Contractual volume represented approximately 57% of the total load volume and 59% of the total revenue in the current quarter compared to 63% and 64%, respectively, in first quarter 2023.

Operating loss was $17.5 million compared to operating loss of $5.4 million for the first quarter 2023. Operating performance declined largely due to an $11.0 million decrease in gross profit, higher insurance costs, and integration and transition costs related to the purchase of the brokerage assets of BNSF Logistics. These items were partially offset by lower personnel-related expenses and reduced technology costs. Gross profit declined 21% versus the prior year period as a result of lower volume and revenue, despite gross profit margins improving to 14.3% as compared to 13.4% in the prior year period. ICS carrier base decreased 22% year-over-year, largely driven by changes to carrier qualification requirements to mitigate cargo theft.

Final Mile Services (FMS)

• First Quarter 2024 Segment Revenue: $229 million; up 2%
• First Quarter 2024 Operating Income: $15.1 million; up 128%

FMS revenue increased 2% compared to the same period 2023. The increase was primarily driven by multiple new contracts implemented over the past year and efforts to improve the overall revenue quality of the business. These items were partially offset by general weakness in demand across many of the end markets served.

Operating income increased 128% to $15.1 million compared to the prior-year period. First quarter 2024 included a $3.1 million benefit from a prior period claim settlement. Excluding this impact, operating income increased primarily from higher revenue and lower personnel, maintenance, and technology costs. These items were partially offset by higher facility rent expense, insurance premiums, bad debt expense, and loss on equipment sales as compared to the prior year period.

Truckload (JBT)

• First Quarter 2024 Segment Revenue: $178 million; down 13%
• First Quarter 2024 Operating Income: $1.2 million; down 75%

JBT revenue decreased 13% compared to the same period in the previous year. Revenue excluding fuel surcharge revenue decreased 13% due to a 9% decline in revenue per load excluding fuel surcharge revenue and a 5% decline in load volume. Total average effective trailer count decreased by approximately 200 units, or 2% versus the prior-year period. Trailer turns in the quarter were down 2% compared to the prior year period primarily due to changes in freight mix and weaker overall freight demand as compared to the first quarter 2023.

JBT operating income decreased 75% to $1.2 million compared to the first quarter 2023. The decrease in operating income was primarily driven by the decline in revenue. JBT segment operating income as a percentage of segment gross revenue declined versus the prior-year period as a result of higher equipment, maintenance and insurance premium expenses as a percentage of gross revenue.

Cash Flow and Capitalization:

At March 31, 2024, we had a total of $1.37 billion outstanding on various debt instruments compared to $1.58 billion at December 31, 2023.

Our net capital expenditures for the first quarter 2024 approximated $166 million compared to $380 million for the first quarter 2023. At March 31, 2024, we had cash and cash equivalents of $64 million.

In the first quarter 2024, we purchased approximately 126,000 shares of our common stock for approximately $25 million. At March 31, 2024, we had approximately $366 million remaining under our share repurchase authorization. Actual shares outstanding at March 31, 2024, approximated 103.2 million.

Conference Call Information:

The company will hold a conference call today from 4:00-5:00 p.m. CDT to discuss the quarterly earnings. Investors will have the opportunity to listen to the conference call live over the internet by going to investor.jbhunt.com. Please log on 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an online replay of the earnings call webcast will be available a few hours after the completion of the call.

Forward-Looking Statements:

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2023. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available to interested parties on our website, www.jbhunt.com.

About J.B. Hunt

J.B. Hunt’s vision is to create the most efficient transportation network in North America. The company’s industry-leading solutions and mode-neutral approach generate value for customers by eliminating waste, reducing costs and enhancing supply chain visibility. Powered by one of the largest company-owned fleets in the country and third-party capacity through its J.B. Hunt 360°® digital freight marketplace, J.B. Hunt can meet the unique shipping needs of any business, from first mile to final delivery, and every shipment in-between. Through disciplined investments in its people, technology and capacity, J.B. Hunt is delivering exceptional value and service that enable long-term growth for the company and its stakeholders.

J.B. Hunt Transport Services Inc. is a Fortune 500 company, an S&P 500 company and a component of the Dow Jones Transportation Average. Its stock trades on NASDAQ under the ticker symbol JBHT. J.B. Hunt Transport Inc. is a wholly owned subsidiary of JBHT. The company’s services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, last mile, transload and more. For more information, visit www.jbhunt.com.

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings (in thousands, except per share data) (unaudited)

 

 

 

Three Months Ended March 31

 

2024

2023

 

% Of % Of

 

Amount Revenue Amount Revenue

 

  Operating revenues, excluding fuel surcharge revenues

$

2,552,486

 

$

2,731,453

 

Fuel surcharge revenues

 

391,515

 

 

498,135

 

Total operating revenues

 

2,944,001

 

100.0%

 

3,229,588

 

100.0%

 

 

 

 

Operating expenses

 

 

 

 

Rents and purchased transportation

 

1,280,987

 

43.5%

 

1,467,798

 

45.4%

Salaries, wages and employee benefits

 

807,884

 

27.4%

 

824,999

 

25.5%

Depreciation and amortization

 

182,996

 

6.2%

 

175,812

 

5.4%

Fuel and fuel taxes

 

173,527

 

5.9%

 

195,834

 

6.1%

Operating supplies and expenses

 

122,991

 

4.2%

 

128,360

 

4.0%

General and administrative expenses, net of asset dispositions

 

76,784

 

2.6%

 

60,404

 

1.9%

Insurance and claims

 

75,686

 

2.6%

 

70,328

 

2.2%

Operating taxes and licenses

 

17,535

 

0.6%

 

18,108

 

0.6%

Communication and utilities

 

11,242

 

0.4%

 

10,456

 

0.3%

Total operating expenses

 

2,749,632

 

93.4%

 

2,952,099

 

91.4%

Operating income

 

194,369

 

6.6%

 

277,489

 

8.6%

Net interest expense

 

15,649

 

0.5%

 

14,789

 

0.5%

Earnings before income taxes

 

178,720

 

6.1%

 

262,700

 

8.1%

Income taxes

 

51,227

 

1.8%

 

64,932

 

2.0%

Net earnings

$

127,493

 

4.3%

$

197,768

 

6.1%

Average diluted shares outstanding

 

104,107

 

 

104,729

 

Diluted earnings per share

$

1.22

 

$

1.89

 

 

 

 

  Financial Information By Segment (in thousands) (unaudited)

 

 

 

 

 

Three Months Ended March 31

 

2024

2023

 

% Of % Of

 

Amount Total Amount Total

 

 

Revenue

 

 

 

 

Intermodal

$

1,395,351

 

47%

$

1,539,560

 

48%

Dedicated

 

860,016

 

29%

 

879,143

 

27%

Integrated Capacity Solutions

 

285,287

 

10%

 

384,774

 

12%

Final Mile Services

 

229,280

 

8%

 

225,077

 

7%

Truckload

 

178,312

 

6%

 

205,862

 

6%

Subtotal

 

2,948,246

 

100%

 

3,234,416

 

100%

Intersegment eliminations

 

(4,245

)

(0%)

 

(4,828

)

(0%)

Consolidated revenue

$

2,944,001

 

100%

$

3,229,588

 

100%

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

Intermodal

$

101,889

 

52%

$

168,658

 

61%

Dedicated

 

93,649

 

48%

 

102,560

 

37%

Integrated Capacity Solutions

 

(17,541

)

(9%)

 

(5,372

)

(2%)

Final Mile Services

 

15,086

 

8%

 

6,619

 

2%

Truckload

 

1,229

 

1%

 

4,990

 

2%

Other (1)

 

57

 

0%

 

34

 

0%

Operating income

$

194,369

 

100%

$

277,489

 

100%

 

 

 

 

 

 

 

  (1) Includes corporate support activity

 

 

  Operating Statistics by Segment (unaudited)

 

 

 

Three Months Ended March 31

 

2024

 

2023

 

 

 

  Intermodal

 

 

 

 

  Loads

 

485,166

 

 

486,091

 

Average length of haul

 

1,689

 

 

1,651

 

Revenue per load

$

2,876

 

$

3,167

 

Average tractors during the period *

 

6,345

 

 

6,599

 

Tractors (end of period) *

 

6,312

 

 

6,574

 

Trailing equipment (end of period)

 

119,307

 

 

116,155

 

Average effective trailing equipment usage

 

96,112

 

 

96,306

 

 

 

 

 

 

  Dedicated

 

 

 

 

  Loads

 

1,004,419

 

 

1,077,372

 

Average length of haul

 

180

 

 

171

 

Revenue per truck per week**

$

5,021

 

$

5,060

 

Average trucks during the period***

 

13,298

 

 

13,469

 

Trucks (end of period) ***

 

13,254

 

 

13,325

 

Trailing equipment (end of period)

 

32,054

 

 

31,153

 

Average effective trailing equipment usage

 

32,996

 

 

31,378

 

 

 

 

 

 

  Integrated Capacity Solutions

 

 

 

 

  Loads

 

158,247

 

 

202,531

 

Revenue per load

$

1,803

 

$

1,900

 

Gross profit margin

 

14.3

%

 

13.4

%

Employee count (end of period)

 

748

 

 

807

 

Approximate number of third-party carriers (end of period)

 

116,300

 

 

149,300

 

Marketplace for J.B. Hunt 360 revenue (millions)

$

105.5

 

$

250.6

 

 

 

 

 

 

  Final Mile Services

 

 

 

 

  Stops

 

1,076,689

 

 

1,162,138

 

Average trucks during the period***

 

1,408

 

 

1,651

 

 

 

 

 

 

  Truckload

 

 

 

 

  Loads

 

93,685

 

 

98,784

 

Revenue per load

$

1,903

 

$

2,084

 

Average length of haul

 

677

 

640

 

 

  Tractors (end of period)

 

Company-owned

 

25

 

104

 

Independent contractor

 

1,908

 

2,058

 

Total tractors

 

1,933

 

2,162

 

 

  Trailers (end of period)

 

13,306

 

13,433

 

Average effective trailing equipment usage

 

12,891

 

13,127

 

 

 

 

 

 

  * Includes company-owned and independent contractor tractors ** Using weighted workdays *** Includes company-owned, independent contractor, and customer-owned trucks

 

  J.B. HUNT TRANSPORT SERVICES, INC. Condensed Consolidated Balance Sheets (in thousands) (unaudited)

 

 

 

March 31, 2024

December 31, 2023 ASSETS

 

Current assets:

 

Cash and cash equivalents

$

64,185

 

$

53,344

 

Accounts Receivable, net

 

1,272,115

 

 

1,334,912

 

Prepaid expenses and other

 

613,260

 

 

696,656

 

Total current assets

 

1,949,560

 

 

2,084,912

 

Property and equipment

 

8,866,281

 

 

8,767,872

 

Less accumulated depreciation

 

3,071,485

 

 

2,993,959

 

Net property and equipment

 

5,794,796

 

 

5,773,913

 

Other assets, net

 

683,427

 

 

679,435

 

$

8,427,783

 

$

8,538,260

 

 

 

 

 

 

  LIABILITIES & STOCKHOLDERS' EQUITY

 

 

Current liabilities:

 

 

Current debt

$

-

 

$

249,961

 

Trade accounts payable

 

731,741

 

 

737,364

 

Claims accruals

 

576,082

 

 

547,277

 

Accrued payroll

 

93,579

 

 

94,563

 

Other accrued expenses

 

142,582

 

 

150,256

 

Total current liabilities

 

1,543,984

 

 

1,779,421

 

 

 

  Long-term debt

 

1,366,506

 

 

1,326,107

 

Other long-term liabilities

 

397,866

 

 

392,766

 

Deferred income taxes

 

952,996

 

 

936,208

 

Stockholders' equity

 

4,166,431

 

 

4,103,758

 

$

8,427,783

 

$

8,538,260

 

 

 

 

 

 

  Supplemental Data (unaudited)

 

 

 

March 31, 2024

December 31, 2023

 

  Actual shares outstanding at end of period (000)

 

103,197

 

103,220

 

 

  Book value per actual share outstanding at end of period

$

40.37

 

$

39.76

 

 

 

 

 

 

 

 

Three Months Ended March 31

 

2024

2023

 

  Net cash provided by operating activities (000)

$

466,467

 

$

487,621

 

 

  Net capital expenditures (000)

$

166,182

 

$

379,831

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240416599723/en/

J.B. Hunt Transport Services, Inc. Brad Delco Senior Vice President – Finance (479) 820-2723