It has been about a month since the last earnings report for J.B. Hunt Transport Services, Inc. JBHT. Shares have added about 5.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
J.B. Hunt Stock Falls on Q2 Earnings, Sales Miss
J.B. Hunt's earnings of of $0.88 per share missed the Zacks Consensus Estimate of $0.92. The bottom line also dipped 4.35% on a year-over-year basis. Total operating revenue increased 6.93% year over year to $1,726 million but marginally fell short of the Zacks Consensus Estimate of $1,733.1 million. Excluding fuel surcharges, operating revenues increased 5% year over year.
Operating income in the second quarter decreased 6.8% to $164 million. Lower customer rates hurt results. But interest expenses increased on a year-over-year basis.
The effective income tax rate in the second quarter of 2017 is 37.4% compared with 38% a year-ago. The company expects a tax rate of 35% for full-year 2017. In addition, the company revised some aspects of its full-year 2017 guidance. For example, CAPEX for 2017 is now projected at $471 million (old guidance: $477 million).
Segmental Performance
The Intermodal division reported quarterly revenues of $1 billion, up 7% year over year. Overall volumes in the segment climbed 5%. Revenue per load, excluding fuel surcharge revenues, dipped 1%. Operating income increased 4% year over year to $110 million.
Dedicated Contract Services revenues increased 8% year over year to $412 million. The company added new trucks to the fleet and customer retention rates remained above 98%. Operating income decreased 4% year over year to $49 million, primarily due to increased costs like driver wages.
Capacity Solutions revenues surged 9% year over year to $222 million on the back of 20% increase in volumes. Revenue per load plunged 9% on a year-over-year basis. Operating income declined over 100% due to lower gross profit margin and higher costs.
Truck revenues decreased 4% to $95 million. At the end of the quarter, the company operated 2,072 tractors, down 5.7% year over year. Also, operating income decreased 37% to $5.6 million due to higher costs like higher driver pay.
Liquidity
At the end of the second quarter, cash and cash equivalents were $7.3 million compared with approximately $6.4 million at the end of 2016. Long-term debt was $943.2 million compared with $986.3 million at the end of 2016.