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What's in the Cards for J.B. Hunt (JBHT) in Q1 Earnings?

Zacks Equity Research

J.B. Hunt Transport Services, Inc. JBHT is scheduled to report first-quarter 2020 results on Apr 14, after the market closes.

The Zacks Consensus Estimate for first-quarter earnings has been revised 1.8% downward in the past 60 days. Moreover, the company has a disappointing earnings history, having surpassed the Zacks Consensus Estimate in only one of the last four quarters (misses in the rest).

Let’s see how things are shaping up for this earnings season.

Factors Likely at Play

Escalating operating expenses due to high wages for drivers and increased rail purchased transportation costs are expected to have affected J.B. Hunt’s bottom line. Acquisition-related costs might also have weighed on the company’s earnings in the first quarter.

Additionally, persistent sluggishness in the freight environment is likely to have hurtvolumes at the Truck segment. The soft volumes in turn might reflect on trucking revenues. Evidently, the Zacks Consensus Estimate for revenues in the Truck segment indicates a 10.8% decline from the year-ago reported figure.

However, ramped-up truck productivity is expected to have driven growth at the Dedicated Contract Services (DCS) segment. Within the DCS segment, Final Mile Services (FMS) revenues are likely to have been strong, courtesy of robust growth in online shopping.

The RDI Last Mile acquisition (completed in January), which has expanded the company’s home delivery capabilities, and the Cory 1st Choice Home Delivery acquisition (completed last February) areanticipated to have boosted the FMS division’s performance. Notably, the Zacks Consensus Estimate for DCS revenues in the first quarter suggests a 13.3% rise from the year-ago reported figure.

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

 

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

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

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Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for J.B. Hunt this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: J.B. Hunt has an Earnings ESP of -3.63% as the Most Accurate Estimate is pegged at $1.03, lower than the Zacks Consensus Estimate of $1.07. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt carries a Zacks Rank #3.

Highlights of Q4 Earnings

In the last reported quarter, the company witnessed a negative earnings surprise of 11.2%. Although total operating revenueslagged the Zacks Consensus Estimate, it increased 5.7% year over year owing to impressive performance of the DCS and Integrated Capacity Solutions segments.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Ardmore Shipping Corporation ASC, Scorpio Tankers Inc. STNG and Ensco plc VAL as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Ardmore Shipping has an Earnings ESP of +37.93% and a Zacks Rank of 3.

Scorpio Tankers has an Earnings ESP of +1.60% and a Zacks Rank #2.
 
Ensco has an Earnings ESP of +0.41% and is Zacks #3 Ranked.

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Ensco plc (VAL) : Free Stock Analysis Report
 
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Scorpio Tankers Inc. (STNG) : Free Stock Analysis Report
 
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