J.B. Hunt falls 4% as margin pressures offset revenue beat

Investing.com --JB Hunt Transport Services Inc (NASDAQ: JBHT) reported third quarter results that met earnings expectations but showed margin compression, sending shares down 4.2% after hours despite a revenue beat.

The transportation and logistics company posted adjusted earnings per share of $1.82, matching the analyst consensus of $1.82. Revenue reached $3.68 billion, surpassing the $3.58 billion estimate and marking a 20% increase from $3.05 billion in the prior-year quarter.

However, operating income rose just 2% to $247.1 million, as operating margin declined to 6.7% from 7.9% a year ago. The margin pressure stemmed from higher purchased transportation costs, increased insurance and medical claims expenses, and elevated professional driver personnel costs.

"I want to thank our people for their unwavering commitment to serving our customers, operating safely and executing with excellence every day," said Shelley Simpson, president and CEO. "We remain confident in our strategy and are building the capabilities needed to support our customers’ evolving needs, strengthen our competitive position and drive long-term profitable growth for our shareholders."

Revenue excluding fuel surcharges increased 13% YoY, driven by an 8% increase in Intermodal loads, a 27% rise in Integrated Capacity Solutions revenue per load, and a 29% jump in Truckload revenue per load, partially offset by a 10% decline in Final Mile Services stops.

The Dedicated Contract Services segment saw operating income fall 22% to $81.7 million despite an 11% revenue increase to $960 million, pressured by higher personnel and medical expenses. Integrated Capacity Solutions turned profitable with $9.6 million in operating income versus a loss of $0.8 million last year, though gross profit margin contracted to 14.3% from 15.0%.

The company repurchased approximately 704,000 shares for $174 million during the quarter and reduced total debt to $1.12 billion from $1.60 billion a year earlier.

Original Article

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