JBHT J B Hunt Transport Services Inc

• Second Quarter 2024 Revenue: $2.93 billion; down 7%
• Second Quarter 2024 Operating Income: $205.7 million; down 24%
• Second Quarter 2024 EPS: $1.32 vs. $1.81; down 27%

J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced second quarter 2024 U.S. GAAP (United States Generally Accepted Accounting Principles) net earnings of $135.9 million, or diluted earnings per share of $1.32 versus second quarter 2023 net earnings of $189.6 million, or $1.81 per diluted share.

Total operating revenue for the current quarter was $2.93 billion, compared with $3.13 billion for the second quarter 2023, a decrease of 7%. The decline in revenue was primarily driven by a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services® (DCS®). These items were partially offset by Final Mile Services® (FMS) revenue growth of 5%, primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS. Current quarter total operating revenue, excluding fuel surcharge revenue, decreased 6% versus the comparable quarter 2023.

Operating income for the current quarter decreased 24% to $205.7 million versus $270.7 million for the second quarter 2023. The decrease in operating income was primarily due to lower revenue, and higher insurance and claims, equipment-related, and certain personnel-related expenses. Operating income as a percentage of gross revenue decreased year-over-year as a result of the same aforementioned expense items, 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 38% from the second quarter 2023 due to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.

The effective income tax rate was 26.8% in the current quarter compared to 26.0% in the second quarter 2023. We continue to expect our 2024 annual tax rate to be between 24.0% and 25.0%.

Segment Information:

Intermodal (JBI)

• Second Quarter 2024 Segment Revenue: $1.41 billion; down 5%
• Second Quarter 2024 Operating Income: $99.2 million; down 31%

Intermodal volume decreased 1% over the same period in 2023. Transcontinental network loads increased 4%, while eastern network loads decreased 7% compared to the second quarter 2023. While experiencing some seasonal build in demand through the quarter, overall performance continued to be pressured by the soft freight market and its impact on over-the-road truck competition in the eastern network. Segment gross revenue decreased 5% from the prior-year period, reflecting the 1% decrease in volume and a 5% decrease in gross revenue per load, resulting from changes in customer rates, fuel surcharge revenue, and the mix of freight. Revenue per load excluding fuel surcharge revenue decreased 4% year-over-year.

Operating income decreased 31% compared to the second quarter 2023 primarily from a combination of lower yields and the underutilization of assets in the network. 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, ownership costs of underutilized equipment, higher equipment and maintenance expenses, and higher insurance and claims expense, as a percentage of gross revenue. During the period, we onboarded 1,862 new pieces of trailing equipment. We ended the quarter with approximately 121,200 containers and 6,200 power units in the dray fleet.

Dedicated Contract Services (DCS)

• Second Quarter 2024 Segment Revenue: $851 million; down 4%
• Second Quarter 2024 Operating Income: $96.4 million; down 15%

DCS revenue decreased 4% during the current quarter over the same period 2023 driven by a 1% decline in average trucks combined with a 3% decline in productivity (revenue per truck per week). Productivity excluding fuel surcharge revenue decreased 3% from a year ago driven primarily from lower utilization and increases in idled equipment, partially offset by contracted indexed-based price escalators. On a net basis, there were 339 fewer revenue-producing trucks in the fleet by the end of the quarter compared to the prior-year period and 365 fewer versus the end of the first quarter 2024. Customer retention rates are approximately 88%, largely reflecting downsizing of fleets and to a lesser extent account losses, as compared to the prior-year period.

Operating income decreased 15% from the prior-year quarter primarily from lower revenue, higher insurance and claims, equipment-related and bad debt expenses 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)

• Second Quarter 2024 Segment Revenue: $270 million; down 21%
• Second Quarter 2024 Operating Loss: $(13.3) million; vs. $(4.4) million in Q2’23

ICS revenue declined 21% during the current quarter versus the second quarter 2023. Overall segment volume decreased 25% versus the prior-year period. Revenue per load increased 5% compared to the second quarter 2023 due to increases in both contractual and transactional rates as well as changes in customer mix. Contractual volume represented approximately 61% of the total load volume and 59% of the gross segment revenue in the current quarter compared to 66% and 64%, respectively, in second quarter 2023.

Operating loss was $13.3 million compared to an operating loss of $4.4 million in the second quarter 2023. The increase in operating loss was largely driven by a $4.9 million decrease in gross profit, higher insurance and claims 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 11% versus the prior-year period as a result of lower revenue, despite gross profit margins improving to 14.8% compared to 13.0% in the prior-year period. This reflects intentional yield management and discipline during bid season and better execution on capacity procurement. The ICS carrier base decreased 24% year-over-year, largely driven by changes to carrier qualification requirements to mitigate cargo theft.

Final Mile Services (FMS)

• Second Quarter 2024 Segment Revenue: $235 million; up 5%
• Second Quarter 2024 Operating Income: $19.8 million; up 33%

FMS revenue increased 5% compared to the same period 2023. The increase was primarily driven by multiple new contracts implemented over the past year. This was partially offset by ongoing efforts to improve revenue quality and profitability across various accounts which resulted in some loss of business in addition to general weakness in demand across some of the end markets served.

Operating income increased 33% compared to the prior-year period. Second quarter 2024 included a $1.1 million net benefit from two offsetting claim settlements. Excluding this impact, operating income increased primarily from higher revenue and lower personnel, equipment-related, and bad debt expenses compared to the prior-year period. These items were partially offset by higher building maintenance expense and loss on sale of equipment as compared to the prior-year period.

Truckload (JBT)

• Second Quarter 2024 Segment Revenue: $168 million; down 12%
• Second Quarter 2024 Operating Income: $3.5 million; down 7%

JBT revenue decreased 12% compared to the same period in the previous year. Revenue excluding fuel surcharge revenue decreased 13% due to a 9% decline in load volume and a 4% decline in revenue per load excluding fuel surcharge revenue. Total average effective trailer count decreased by approximately 500 units, or 4% versus the prior-year period. Trailer turns in the quarter were down 5% from the prior period primarily due to weaker overall market demand compared to the second quarter 2023.

JBT operating income decreased 7% to $3.5 million compared to the second 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 improved slightly year-over-year as a result of overall cost management initiatives, partially offset by higher third-party capacity cost and insurance and claims expense as a percentage of gross revenue.

Cash Flow and Capitalization:

At June 30, 2024, we had approximately $1.48 billion outstanding on various debt instruments compared to $1.45 billion at June 30, 2023 and $1.58 billion at December 31, 2023.

Our net capital expenditures for the six months ended June 30, 2024 approximated $409 million compared to $854 million for the same period 2023. At June 30, 2024, we had cash and cash equivalents of approximately $54 million.

In the second quarter 2024, we purchased approximately 1,225,000 shares of common stock for approximately $203 million. At June 30, 2024, we had approximately $163 million remaining under our share repurchase authorization. Actual shares outstanding at June 30, 2024 approximated 102.0 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 June 30

2024

 

 

2023

 

 

% Of

 

 

 

 

% Of

Amount

 

Revenue

 

 

Amount

 

Revenue

    Operating revenues, excluding fuel surcharge revenues $

2,545,023

  $

2,707,560

Fuel surcharge revenues

383,662

 

425,063

Total operating revenues

2,928,685

100.0

%

 

3,132,623

100.0

%

    Operating expenses   Rents and purchased transportation

1,274,011

43.5

%

 

1,404,586

44.8

%

Salaries, wages and employee benefits

803,047

27.4

%

 

821,876

26.2

%

Depreciation and amortization

184,658

6.3

%

 

179,972

5.7

%

Fuel and fuel taxes

164,291

5.6

%

 

171,846

5.5

%

Operating supplies and expenses

120,425

4.1

%

 

128,949

4.1

%

General and administrative expenses, net of asset dispositions

74,707

2.6

%

 

61,472

2.1

%

Insurance and claims

73,222

2.5

%

 

63,893

2.1

%

Operating taxes and licenses

17,575

0.6

%

 

18,951

0.6

%

Communication and utilities

11,040

0.4

%

 

10,366

0.3

%

Total operating expenses

2,722,976

93.0

%

 

2,861,911

91.4

%

Operating income

205,709

7.0

%

 

270,712

8.6

%

Net interest expense

20,198

0.7

%

 

14,604

0.4

%

Earnings before income taxes

185,511

6.3

%

 

256,108

8.2

%

Income taxes

49,638

1.7

%

 

66,556

2.1

%

Net earnings $

135,873

4.6

%

  $

189,552

6.1

%

Average diluted shares outstanding

103,146

 

104,566

Diluted earnings per share $

                1.32

  $

                1.81

       

J.B. HUNT TRANSPORT SERVICES, INC.

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

Six Months Ended June 30

2024

 

 

2023

 

 

% Of

 

 

 

 

% Of

Amount

 

Revenue

 

 

Amount

 

Revenue

    Operating revenues, excluding fuel surcharge revenues $

5,097,508

  $

5,450,070

Fuel surcharge revenues

775,177

 

912,142

Total operating revenues

5,872,685

100.0

%

 

6,362,212

100.0

%

    Operating expenses   Rents and purchased transportation

2,554,998

43.5

%

 

2,872,384

45.1

%

Salaries, wages and employee benefits

1,610,931

27.4

%

 

1,646,875

25.9

%

Depreciation and amortization

367,655

6.3

%

 

355,784

5.6

%

Fuel and fuel taxes

337,817

5.8

%

 

367,680

5.8

%

Operating supplies and expenses

243,416

4.1

%

 

257,308

4.0

%

General and administrative expenses, net of asset dispositions

151,490

2.6

%

 

121,879

2.0

%

Insurance and claims

148,908

2.5

%

 

134,221

2.1

%

Operating taxes and licenses

35,110

0.6

%

 

37,058

0.6

%

Communication and utilities

22,282

0.4

%

 

20,822

0.3

%

Total operating expenses

5,472,607

93.2

%

 

5,814,011

91.4

%

Operating income

400,078

6.8

%

 

548,201

8.6

%

Net interest expense

35,847

0.6

%

 

29,393

0.4

%

Earnings before income taxes

364,231

6.2

%

 

518,808

8.2

%

Income taxes

100,865

1.7

%

 

131,488

2.1

%

Net earnings $

263,366

4.5

%

  $

387,320

6.1

%

Average diluted shares outstanding

103,626

 

104,647

Diluted earnings per share $

                2.54

  $

                3.70

        Financial Information By Segment  (in thousands) (unaudited)    

Three Months Ended June 30

2024

 

 

2023

 

 

% Of

 

 

 

 

% Of

Amount

 

Total

 

 

Amount

 

Total

    Revenue       Intermodal $

1,407,496

 

48

%

  $

1,489,148

 

48

%

Dedicated

851,010

 

29

%

 

887,593

 

28

%

Integrated Capacity Solutions

270,378

 

9

%

 

343,691

 

11

%

Final Mile Services

235,290

 

8

%

 

223,939

 

7

%

Truckload

168,095

 

6

%

 

191,803

 

6

%

Subtotal

2,932,269

 

100

%

 

3,136,174

 

100

%

Intersegment eliminations

(3,584

)

(0

%)

 

(3,551

)

(0

%)

Consolidated revenue $

2,928,685

 

100

%

  $

3,132,623

 

100

%

        Operating income       Intermodal $

99,244

 

48

%

  $

142,860

 

53

%

Dedicated

96,410

 

47

%

 

113,615

 

42

%

Integrated Capacity Solutions

(13,287

)

(7

%)

 

(4,419

)

(2

%)

Final Mile Services

19,778

 

10

%

 

14,824

 

5

%

Truckload

3,549

 

2

%

 

3,798

 

2

%

Other (1)

15

 

0

%

 

34

 

0

%

Operating income $

205,709

 

100

%

  $

270,712

 

100

%

       

Six Months Ended June 30

2024

 

 

2023

 

 

% Of

 

 

 

 

% Of

Amount

 

Total

 

 

Amount

 

Total

Revenue       Intermodal $

2,802,846

 

48

%

  $

3,028,707

 

48

%

Dedicated

1,711,026

 

29

%

 

1,766,735

 

28

%

Integrated Capacity Solutions

555,665

 

9

%

 

728,465

 

11

%

Final Mile Services

464,570

 

8

%

 

449,016

 

7

%

Truckload

346,407

 

6

%

 

397,665

 

6

%

Subtotal

5,880,514

 

100

%

 

6,370,588

 

100

%

Intersegment eliminations

(7,829

)

(0

%)

 

(8,376

)

(0

%)

Consolidated revenue $

5,872,685

 

100

%

  $

6,362,212

 

100

%

        Operating income       Intermodal $

201,133

 

50

%

  $

311,518

 

57

%

Dedicated

190,060

 

48

%

 

216,175

 

39

%

Integrated Capacity Solutions

(30,828

)

(8

%)

 

(9,791

)

(2

%)

Final Mile Services

34,864

 

9

%

 

21,444

 

4

%

Truckload

4,778

 

1

%

 

8,788

 

2

%

Other (1)

71

 

0

%

 

67

 

0

%

Operating income $

400,078

 

100

%

  $

548,201

 

100

%

    (1) Includes corporate support activity         Operating Statistics by Segment (unaudited)  

Three Months Ended June 30

2024

 

 

2023

  Intermodal Loads

497,446

 

501,681

 

Average length of haul

1,689

 

1,655

 

Revenue per load $

2,829

 

$

2,968

 

Average tractors during the period *

6,209

 

6,517

 

Tractors (end of period) *

6,162

 

6,491

 

Trailing equipment (end of period)

121,169

 

116,481

 

Average effective trailing equipment usage

98,350

 

95,815

 

  Dedicated Loads

1,007,798

 

1,104,896

 

Average length of haul

182

 

172

 

Revenue per truck per week** $

5,004

 

$

5,182

 

Average trucks during the period***

13,142

 

13,236

 

Trucks (end of period) ***

12,889

 

13,228

 

Trailing equipment (end of period)

31,802

 

31,280

 

Average effective trailing equipment usage

32,461

 

31,979

 

  Integrated Capacity Solutions Loads

145,362

 

194,635

 

Revenue per load $

  1,860

 

$

1,766

 

Gross profit margin

14.8

%

13.0

%

Employee count (end of period)

  708

 

769

 

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

109,200

 

144,600

 

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

    104.1

 

$

225.0

 

  Final Mile Services Stops

1,098,521

 

1,141,415

 

Average trucks during the period***

 1,374

 

1,551

 

  Truckload Loads

92,628

 

101,402

 

Revenue per load $

 1,815

 

$

1,892

 

Average length of haul

646

 

659

 

  Tractors (end of period) Company-owned

23

 

33

 

Independent contractor

1,874

 

2,035

 

Total tractors

1,897

 

2,068

 

  Trailers (end of period)

13,299

 

13,851

 

Average effective trailing equipment usage

12,600

 

13,108

 

  * Includes company-owned and independent contractor tractors ** Using weighted workdays *** Includes company-owned, independent contractor, and customer-owned trucks         Operating Statistics by Segment (unaudited)  

Six Months Ended June 30

2024

 

 

2023

  Intermodal Loads

982,612

 

987,772

 

Average length of haul

1,689

 

1,653

 

Revenue per load $

2,852

 

$

3,066

 

Average tractors during the period *

6,277

 

6,558

 

Tractors (end of period) *

  6,162

 

6,491

 

Trailing equipment (end of period)

121,169

 

116,481

 

Average effective trailing equipment usage

97,231

 

96,061

 

  Dedicated Loads

2,012,135

 

2,182,268

 

Average length of haul

181

 

172

 

Revenue per truck per week** $

5,012

 

$

5,120

 

Average trucks during the period***

13,220

 

13,353

 

Trucks (end of period) ***

12,889

 

13,228

 

Trailing equipment (end of period)

31,802

 

31,280

 

Average effective trailing equipment usage

32,728

 

31,679

 

  Integrated Capacity Solutions Loads

303,609

 

397,166

 

Revenue per load $

1,830

 

$

1,834

 

Gross profit margin

14.5

%

13.3

%

Employee count (end of period)

708

 

769

 

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

109,200

 

144,600

 

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

209.6

 

$

475.6

 

  Final Mile Services Stops

2,175,210

 

2,303,553

 

Average trucks during the period***

1,391

 

1,601

 

  Truckload Loads

186,313

 

200,186

 

Revenue per load $

1,859

 

$

1,986

 

Average length of haul

662

 

650

 

  Tractors (end of period) Company-owned

23

 

33

 

Independent contractor

1,874

 

2,035

 

Total tractors

1,897

 

2,068

 

  Trailers (end of period)

13,299

 

13,851

 

Average effective trailing equipment usage

12,746

 

13,118

 

  * 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)    

June 30, 2024

 

December 31, 2023

ASSETS Current assets: Cash and cash equivalents $

53,505

$

53,344

Accounts Receivable, net

1,251,665

1,334,912

Prepaid expenses and other

608,540

696,656

Total current assets  

1,913,710

 

2,084,912

Property and equipment

9,007,510

8,767,872

Less accumulated depreciation  

3,174,017

 

2,993,959

Net property and equipment  

5,833,493

 

5,773,913

Other assets, net  

668,677

 

679,435

  $

8,415,880

$

8,538,260

LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Current debt $

 - 

$

249,961

Trade accounts payable

724,862

737,364

Claims accruals

594,482

547,277

Accrued payroll

111,234

94,563

Other accrued expenses

150,882

150,256

Total current liabilities  

1,581,460

 

1,779,421

Long-term debt

1,483,804

1,326,107

Other long-term liabilities

394,494

392,766

Deferred income taxes

880,126

936,208

Shareholders' equity  

4,075,996

 

4,103,758

  $

8,415,880

$

8,538,260

 

Supplemental Data

(unaudited)

           

June 30, 2024

 

December 31, 2023

Actual shares outstanding at end of period (000)  

101,987

 

103,220

Book value per actual share outstanding at end of period $

39.97

$

39.76

              

Six Months Ended June 30    

2024

2023

Net cash provided by operating activities (000) $

827,021

$

1,097,290

Net capital expenditures (000) $

408,853

$

853,778

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716256509/en/

Brad Delco Senior Vice President – Finance (479) 820-2723