J.B. Hunt Transport Services Inc.
661fbfc68bfa73001e22a806 Jbht Hq

J.B. Hunt still looking at the long run after disappointing Q1

April 17, 2024
Revenues fell 9% and bid season hasn’t brought pricing relief. The carrier’s leaders say they remain committed to growing into recent investments rather than making big cuts.

"It's been a lot more fun than it hasn't; it's just not a lot of fun right now."

John Roberts, J.B. Hunt Transport Services' outgoing CEO, didn't get to deliver a peppy farewell speech on the company's April 16 first-quarter earnings conference call. Two years into a corrosive freight downturn, Roberts and his team instead had to relay weak results for Arkansas-based J.B. Hunt in the face of fickle demand, rising costs, and fierce price competition—including from trucking firms taking some of its East Coast intermodal business.

J.B. Hunt, No. 4 on the FleetOwner 500: For-Hire, produced a net profit of $127 million in the first three months of the year, a hefty drop from the $198 million in early 2023. Operating profits, meanwhile, slid to $194 million versus $277 million as revenues fell 9% to $2.94 billion.

"We continue to view the market as out of balance and customers have been and are taking advantage," President (and incoming CEO) Shelley Simpson said on the conference call.

See also: Shelley Simpson named J.B. Hunt's next CEO

Division-level details show how widespread the weak market conditions continue to be. Revenues at its three largest groups—intermodal, dedicated, and brokerage—were down 9%, 2%, and 26%, respectively. Combined, those businesses account for more than 85% of sales.

Revenue per load in J.B. Hunt's intermodal and truckload divisions was down 9% year over year during the first quarter, and that general trend doesn't look like it will reverse soon. Simpson and her colleagues said they've been surprised at the level of price competition during the current bid season.

Those numbers and trends meant that Simpson and other top executives needed to insist—as they have for the past handful of quarters—that the investments and strategic choices they have been making will pay off in the long run. CFO John Kuhlow said recent spending on people, technology, and equipment means J.B. Hunt is carrying $100 million in extra costs on an annual basis versus market demand—a figure he said the company will grow into over time rather than look to cut in the near future.

"If we were focused on the short term, there could be a different play to call here," Kuhlow said. "We're focused on growing into this capacity and holding on to our commitments to our people for the long term."

There were a few bright spots during the quarter for J.B. Hunt: While intermodal volume fell 7% in its Eastern network, business in Southern California grew by double digits. And the company's final-mile unit more than doubled its operating income from early last year to $15.1 million, a figure that also got a boost from a $3.1 million claim settlement.

Shares of J.B. Hunt (Ticker: JBHT) look like they're in for a rough day. They were off more than 7% to about $169 in pre-market trading April 17. That leaves them down about 10% over the past six months, a trend that has trimmed the company's market capitalization to about $18 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare InnovationIndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

Leveraging telematics to get the most from insurance

Fleet owners are quickly adopting telematics as part of their risk mitigation strategy. Here’s why.

Reliable EV Charging Solution for Last-Mile Delivery Fleets

Selecting the right EV charging infrastructure and the right partner to best solve your needs are critical. Learn which solution PepsiCo is choosing to power their fleet and help...

Overcoming Common Roadblocks Associated with Fleet Electrification at Scale

Fleets in the United States, are increasingly transitioning from internal combustion engine vehicles to electric vehicles. While this shift presents challenges, there are strategies...

Report: The 2024 State of Heavy-Duty Repair

From capitalizing on the latest revenue trends to implementing strategic financial planning—this report serves as a roadmap for navigating the challenges and opportunities of ...