Post Earnings Coverage as J.B. Hunt Operating Revenue Increased 6%; Raised Quarterly Dividend by 4.5%
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Upcoming AWS Coverage on Old Dominion Freight Line Post-Earnings Results
LONDON, UK / ACCESSWIRE / January 30, 2017 / Active Wall St. announces its post-earnings coverage on J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT). The Company posted its financial results for the fourth quarter and full year 2016 on January 19, 2017. The transportation Company's sales numbers outperformed market expectations, while earnings lagged behind. Register with us now for your free membership at:
One of J.B. Hunt Transport Services' competitors within the Trucking space, Old Dominion Freight Line, Inc. (NASDAQ: ODFL), announced on January 12, 2017, that it will release its Q4 and year-end 2016 financial results before opening of trading on Thursday, February 02, 2017. The Company will also hold a conference call to discuss its financial results and outlook at 10:00 a.m. ET on the same day. AWS will be initiating a research report on Old Dominion Freight Line in the coming days.
Today, AWS is promoting its earnings coverage on JBHT; touching on ODFL. Get our free coverage by signing up to:
For the fourth quarter ended December 31, 2016, J.B. Hunt's total operating revenue was $1.72 billion compared to $1.62 billion for Q4 FY15. The current quarter total operating revenue, excluding fuel surcharges, increased 6% versus the comparable quarter 2015. The Company's revenue numbers were above analysts' forecasts of $1.71 billion. For FY16, J.B. Hunt reported revenue of $6.56 billion compared to revenue of $6.19 billion for FY15.
The Company's operating income for Q4 FY16 increased to $194.4 million versus $192.9 million for Q4 FY15. The increase was primarily attributed to higher revenue in JBI, DCS, and ICS business segments and a $15.2 million pre-tax, one-time benefit recorded to reflect a change in employee paid time off policy.
J.B. Hunt reported Q4 2016 net earnings of $117.6 million, or diluted earnings per share of $1.05, versus Q4 2015 net earnings of $116.7 million, or $1.01 per diluted share. The reported quarter net earnings included a one-time after tax benefit of $9.5 million, or $0.08 per diluted share, for a change in the Company's paid time off policy. The Company attributed the increase in earnings to growth in revenue, the paid time off policy change benefit, and a lower effective income tax rate. J.B. Hunt's earnings, adjusted for pre-tax gains, came in at $0.97 per share, below Wall Street's forecasts of $1.00 per share.
Segment Information
Intermodal (JBI)
J.B. Hunt's Intermodal segment reported revenue of $998 million for Q4 2016, up 3% y-o-y, reflecting volume growth of 5% and a 2% decrease in revenue per load which is the combination of freight mix, customer rate increases, and fuel surcharges. The division recorded operating income of $124 million, down 3% on a y-o-y basis. The division's Eastern network loads were flat and transcontinental loads increased 9% compared to Q4 2015. The current period ended with approximately 84,600 units of trailing capacity and approximately 5,280 power units in the dray fleet.
Dedicated Contract Services (DCS)
During Q4 2016, revenue from J.B. Hunt's DCS segment grew 8% to $398 million, while its operating income soared 37% to $57.5 million. The division's productivity (revenue per truck per week) increased approximately 5% versus 2015. Productivity excluding fuel surcharge revenue increased approximately 3% from a year ago primarily from improved integration of assets between customer accounts, fewer unseated trucks, increased customer supply chain fluidity, and customer rate increases. A y-o-y net additional 193 revenue producing trucks, 29 net additions compared to Q3 2016, were in the fleet by the end of Q4 2016.
Integrated Capacity Solutions (ICS)
For Q4 2016, J.B. Hunt's ICS segment registered revenue growth of 22% to $232 million, primarily due to a 38% increase in volume offset by a 12% decrease in revenue per load and freight mix changes driven by customer demand. The segment's Q4 2016 operating income totaled $6.1 million; down 52%, primarily due to a lower gross profit margin, increased claim costs, higher technology costs, and increased personnel costs which was partially offset with approximately $1.0 million from the change in paid time off policy. ICS segment's gross profit margin decreased to 12.9% in Q4 2016 from 16.0% in Q4 2015, primarily from new customer rates implemented during the reported quarter and lower spot. Total branches at the end of the period grew to 42 from 34 at the end of the same period in 2015.
Truck (JBT)
J.B. Hunt's Truck segment reported revenue of $96 million, down 3% on a y-o-y basis. The segment's revenue excluding fuel surcharges also decreased 3% primarily from a 3% decrease in rate per mile due to core customer rate decreases of approximately 1.4% and freight mix changes compared to Q4 2015. The Truck unit's Q4 2016 operating income declined 35% to $ 6.8 million. At the end of Q4 2016, JBT operated 2,128 tractors compared to 2,149 a year ago.
Cash Flow and Capitalization
At December 31, 2016, J.B. Hunt had total debt outstanding of $986 million on various debt instruments compared to $998 million at December 31, 2015. The Company's net capital expenditures for FY16 approximated $485 million versus $556 million in 2015. At December 31, 2016, J.B. Hunt had cash and cash equivalents of $6.4 million.
In Q4 2016, J.B. Hunt purchased 880,000 shares of its common stock for approximately $75 million. At December 31, 2016, the Company had approximately $201 million remaining under its share repurchase authorization.
On January 25, 2017, J.B. Hunt announced that its Board of Directors has declared the regular quarterly dividend on its common stock of $ 0.23 per common share, which is an approximate 4.5% increase from the previous quarterly dividend of $0.22 per share. The dividend is payable to stockholders of record on February 10, 2017. The dividend will be paid on February 24, 2017.
Stock Performance
At the closing bell, on Friday, January 27, 2017, J.B. Hunt's stock closed the trading session at $98.87, marginally rising 0.11% from its previous closing price of $98.76. A total volume of 605.19 thousand shares have exchanged hands. J.B. Hunt's stock price advanced 23.46% in the last three months, 19.52% in the past six months, and 42.29% in the previous twelve months. The Company's shares are trading at a PE ratio of 25.93 and have a dividend yield of 0.89%.
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