J.B. Hunt's (JBHT) Q4 Earnings & Revenues Beat, Surge Y/Y

J.B. Hunt Transport Services JBHT reported better-than-expected fourth-quarter 2021 results. Quarterly earnings of $2.28 per share surpassed the Zacks Consensus Estimate of $1.99. The bottom line surged 58.3% year over year on the back of higher revenues across all segments.

Total operating revenues of $3,497 million also outperformed the Zacks Consensus Estimate of $3,287.8 million. The top line jumped 27.7% year over year. Total operating revenues, excluding fuel surcharges, rose 21.7% year over year.

Quarterly operating income (on a reported basis) climbed 55.3% to $322.5 million despite network fluidity challenges. Operating expenses escalated 25.5%, primarily due to rising wages and truck purchase transportation costs.

J.B. Hunt Transport Services, Inc. Price, Consensus and EPS Surprise

J.B. Hunt Transport Services, Inc. Price, Consensus and EPS Surprise

J.B. Hunt Transport Services, Inc. price-consensus-eps-surprise-chart | J.B. Hunt Transport Services, Inc. Quote

Segmental Highlights

Intermodal division generated quarterly revenues of $1.57 billion, up 26% year over year. Revenue per load climbed 30% in the quarter under discussion. Volumes decreased 3% year over year. While Eastern network loads inched up 1%, transcontinental loads declined 5% from the year-ago period. Despite strong demand for intermodal capacity, volumes were affected by network fluidity challenges due to bad weather, derailments and coronavirus-induced labor shortages, among other factors. Operating income soared 76% year over year to $195.3 million, driven by higher customer rate and cost-recovery efforts.

Dedicated Contract Services segment revenues rose 25% from the year-ago period to $712 million, owing to fleet productivity improvement and increase in average revenue-producing trucks. The company’s fleet at the end of the quarter had 1,778 more revenue-producing trucks (on a net basis) versus a year ago. However, operating income decreased 6% to $72.6 million.

Integrated Capacity Solutions revenues increased 26% year over year to $739 million. Segmental volumes dipped 1% from the year-ago period despite truckload volumes increasing 3%. Revenue per load climbed 27% owing to favorable customer freight mix, and higher contractual and spot rates. The segment’s operating income was $21.2 million in the reported quarter compared with $5.6 million in the fourth quarter of 2020.

Final Mile Services revenues ascended 4% year over year to $222 million due to the addition of multiple customer contracts over the last year. The segment’s operating income was $7.4 million in the reported quarter, up 35%. Higher revenues from multiple new customer contracts boosted segmental operating income.

Truckload revenues soared 85% to $259 million. Excluding fuel surcharge revenues, segmental revenues rose 79% year over year due to 55% increase in revenue per load (excluding fuel surcharge revenue) and 15% rise in load count. At the end of the fourth quarter, total tractors and trailers were 2,235 and 11,172, respectively, compared with the year-ago quarter’s figures of 1,769 and 8,567. Truckload operating income skyrocketed more than 200% to $25.9 million on the back of increased load counts and revenue per load.

Liquidity & Buyback

J.B. Hunt, carrying a Zacks Rank #2 (Buy), exited the fourth quarter with cash and cash equivalents of $355.55 million compared with $313.30 million at the end of 2020. Long-term debt was $945.26 million compared with $1.31 billion at 2020-end. Net capital expenditures at the end of 2021 amounted to $877.02 million compared with $600.77 million at the end of 2020.

During the reported quarter, J.B. Hunt repurchased around 76,000 shares for approximately $15 million. The trucking company had approximately $351 million remaining under its share repurchase authorization at the end of the fourth quarter.

Other Key Picks

Some other top-ranked stocks within the broader Transportation sector are as follows:

Expeditors International of Washington EXPD sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history. Its earnings have outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 29.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Expeditors’ fourth-quarter performance is expected to have benefited from higher Airfreight Services’ revenues, thanks to the coronavirus-induced cancellation of multiple passenger flights (that usually carry freight as well as passenger luggage), which has increased the usage of charters to meet customers’ needs. Shares of the company have gained approximately 28% in a year.

Schneider National SNDR also flaunts a Zacks Rank #1. The company’s earnings have trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21%.

Schneider National’s fourth-quarter performance is expected to have been aided by yield management, higher revenue per order, increased volumes, favorable constructive market conditions and increased spot mix, among other factors. Shares of the company have appreciated about 15% in a year.

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