J.B. Hunt Transport Services reported higher intermodal segment volumes, partially offsetting lower volumes in its Dedicated Contract Services (DCS) and truck segments for the first quarter, the company announced this morning.
First-quarter net earnings were $30.8 million or 24 cents per share, vs. $36.4 million and 28 cents per diluted share in the first quarter of 2008. Total operating revenue dropped 18% to $723 million from $878 million. The company said the drop was attributable to lower fuel surcharge revenues, reflecting significantly lower fuel costs in the first quarter of 2009.
"Our two biggest segments, Intermodal and DCS, which make up 79% of our total revenues, continue to differentiate us from other generic transportation offerings. Despite a weak economy and lower demand, both Intermodal and DCS have shown great resilience in profitability in the face of serious negative macroeconomic conditions," Kirk Thompson, president & CEO, said in a release.
J.B Hunt said the truck revenue declines are a result of an ongoing strategy to reduce the size of the segment’s tractor fleet and due to weaker demand brought on by the recession.
"The lingering freight recession, now estimated to be in the third year, is the longest and deepest in modern transportation history," Thompson added. "Our diversification strategy initiated several years ago and our best-in-class intermodal and dedicated services have helped sustain our earnings in these turbulent times. We believe we have taken the right actions to weather this downturn, while leaving the company very well positioned for the eventual recovery. Intermodal and DCS, in particular, are leaders in markets where we have established defensible characteristics. Further, ICS enables us to bring the substantial resources of our company into markets that previously did not fit our network."
Operating revenue, excluding fuel surcharges, declined 8%, to $57 million from $72.1 million in 2008. The decline is due to a drop in intermodal operating income, down 20% to $41.3 million, as well as an operating loss of $5.8 million in the truck segment on revenues of $102 million, a 45% drop from 2008. The DCS segment saw a 5% decline in income, dropping to $17.4 million on revenues of $179 million.
The company said it ran 373 fewer truck units in the first quarter of 2009 vs. 2008. Net interest expense declined approximately $4.8 million, compared with the same period 2008, primarily due to the reduction of outstanding debt and lower interest rates. The company reported $629 million in outstanding debt as of March 31, 2009, compared to $865 million on March 31, 2008.