- Third Quarter 2017 Revenue:
$1.84 billion; up 9%
- Third Quarter 2017 Operating
Income: $165 million; down 10%
- Third Quarter 2017 EPS: 91
cents vs. 97 cents
J.B. Hunt Transport Services, Inc., (NASDAQ: JBHT) announced
third quarter 2017 net earnings of $100.4 million, or diluted
earnings per share of 91 cents vs. third quarter 2016 net earnings
of $109.4 million, or 97 cents per diluted share.
Total operating revenue for the current quarter was $1.84
billion, compared with $1.69 billion for the third quarter 2016.
Load growth of 6% in Intermodal (JBI), a 14% increase in revenue
producing trucks and improved asset productivity in Dedicated
Contract Services (DCS)™ and a 17% increase in revenue per load in
Integrated Capacity Solutions (ICS) contributed to the increase in
consolidated revenue compared to prior year. Operating revenue
growth was partially offset by a 7% decrease in load count in the
Truck (JBT) business segment and the disruption caused by
hurricanes Harvey, Irma and Maria. Current quarter total operating
revenue, excluding fuel surcharges, increased 8% vs. the comparable
quarter 2016.
Operating income for the current quarter totaled $165 million
vs. $183 million for the third quarter 2016. Operating income
decreased from third quarter 2016 primarily from increases in
driver wages and recruiting costs, increased rail purchase
transportation rates, higher insurance and claims costs, increased
legal and consulting costs, higher equipment maintenance costs and
acquisition and integration costs incurred by DCS with the purchase
of Special Logistics Dedicated (SLD) that closed during the
quarter.
Interest expense in the current quarter increased primarily from
higher debt balances and higher interest rates compared to third
quarter 2016. The effective income tax rate for the current quarter
is 35.9%, compared to 38% in the third quarter 2016. We expect our
2017 annual tax rate to be approximately 35%.
Segment Information:
Intermodal (JBI)
- Third Quarter 2017 Segment
Revenue: $1.05 billion; up 8%
- Third Quarter 2017 Operating
Income: $109.1 million; down 7%
Overall volumes increased 6% over the same period in 2016. The
Eastern network realized load growth of 2% and Transcontinental
loads grew 8% over the third quarter 2016. The network disruption
caused from hurricanes Harvey, Irma and Maria limited our ability
to handle approximately 5,500 loads in the current period. Revenue
increased 8% reflecting the 6% volume growth and an approximate 2%
increase in revenue per load, which is the combination of changes
in customer rate, freight mix and fuel surcharges. Revenue per load
excluding fuel surcharges was flat compared to third quarter
2016.
Operating income decreased 7% over prior year. Benefits from
improved volumes were offset by increased costs to attract, place
and retain drivers; higher insurance and claims costs; increases in
rail purchased transportation rates; increases in costs from
inefficiencies due to rail congestion, rationalization and
maintenance; and approximately $1.8 million in additional costs and
inefficiencies in the dray and rail networks in areas directly
affected by natural disasters. The current period ended with
approximately 87,000 units of trailing capacity and 5,500 power
units assigned to the dray fleet.
Dedicated Contract Services (DCS)
- Third Quarter 2017 Segment
Revenue: $438 million; up 11%
- Third Quarter 2017 Operating
Income: $42.9 million; down 18%
DCS revenue increased 11% during the current quarter over the
same period in 2016. Productivity (revenue per truck per week)
increased by approximately 2% vs. 2016. Productivity excluding fuel
surcharge revenue was flat from a year ago. Increased revenue from
better integration of assets between customer accounts and customer
rate increases was partially offset by lower productivity at new
contracts implemented during the current quarter. A net additional
1,024 revenue producing trucks, 621 net additions sequentially from
second quarter 2017 including 328 acquired in the SLD purchase,
were in the fleet by the end of the quarter. Approximately 63% of
these additions represent private fleet conversions versus
traditional dedicated capacity services. Customer retention rates
remain above 98%.
Operating income decreased by 18% from a year ago primarily from
the timing between increasing driver wages and recovery through
customer contracts, increased driver recruiting costs including the
length of time to fill open trucks, increased insurance and claims
costs, increased salaries and benefits costs, higher equipment
ownership costs and approximately $1 million of excess costs
associated with operations in the hurricane affected regions
compared to the same period in 2016. During the current period, DCS
incurred approximately $3 million in acquisition costs and $1.5
million in intangible asset amortization due to the purchase of
SLD.
Integrated Capacity Solutions (ICS)
- Third Quarter 2017 Segment
Revenue: $269 million; up 16%
- Third Quarter 2017 Operating
Income: $ 7.3 million; down 14%
ICS revenue increased 16% in the current quarter vs. the third
quarter 2016. Revenue per load increased 17% from increased spot
market activity while load volumes decreased 1% vs third quarter
2016. While continuing to meet our customer commitments, increased
spot market activity created a better balance between contractual
and spot revenues. Contractual volumes represented approximately
65% of total load volume and 48% of total revenue in the current
quarter compared to 75% and 64%, respectively, in third quarter
2016.
Operating income decreased 14% over the same period 2016. Gross
profit margin was flat at 12.8% compared to the prior year as
continued compression of gross margins in contractual business
offset improvements in spot market gross margins. Higher year over
year technology development costs and a higher number of branches
open less than two years (23 vs. 15) more than offset the increased
revenue compared to a year ago. Total location count grew to 44
compared to 40 at the end of third quarter last year. ICS’s carrier
base increased 10% and the employee count increased 17% vs. third
quarter 2016.
Truck (JBT)
- Third Quarter 2017 Segment
Revenue: $ 93 million; down 5%
- Third Quarter 2017 Operating
Income: $ 5.7 million; up 12%
JBT revenue was down 5% from the same period in 2016. Revenue
excluding fuel surcharge decreased 6%, primarily from a 7% decrease
in load count from third quarter 2016. Revenue per load increased
approximately 1% due to a 4% increase in rates per loaded mile
offset by a 3% decrease in length of haul compared to a year ago.
Comparable contractual customer rates were flat compared to the
same period in 2016. At the end of the period, JBT operated 2,040
tractors compared to 2,183 a year ago.
Operating income increased 12% compared to third quarter 2016.
Favorable changes from higher rates per loaded mile and lower
insurance and claims costs were partially offset by increased
driver wages and independent contractor costs per mile, a decrease
in fleet size, lower tractor utilization from an increase in
unseated trucks and higher equipment maintenance costs compared to
third quarter 2016.
Cash Flow and Capitalization:
At September 30, 2017, we had a total of $1.08 billion
outstanding on various debt instruments compared to $944 million at
September 30, 2016 and $986 million at December 31, 2016.
Our net capital expenditures for the nine months ended September
30, 2017 approximated $330 million compared to $359 million for the
same period 2016. At September 30, 2017, we had cash and cash
equivalents of approximately $7.7 million. Other assets include
approximately $55-$65 million of amortizable intangible assets
related to the purchase of SLD.
We had no purchases of our common stock during the third quarter
2017. At September 30,2017, we had approximately $521 million
remaining under our combined share repurchase authorizations.
Actual shares outstanding at September 30, 2017 approximated 110
million.
This press release may contain forward-looking statements, which
are based on information currently available. Actual results may
differ materially from those currently anticipated due to a number
of factors, including, but not limited to, those discussed in Item
1A of our Annual Report filed on Form 10-K for the year ended
December 31, 2016. We assume no obligation to update any
forward-looking statement to the extent we become aware that it
will not be achieved for any reason. This press release and
additional information will be available immediately to interested
parties on our web site, www.jbhunt.com.
J.B. HUNT TRANSPORT SERVICES,
INC. Condensed Consolidated Statements of Earnings (in
thousands, except per share data) (unaudited)
Three Months Ended
September 30 2017 2016 % Of % Of
Amount Revenue Amount
Revenue Operating revenues, excluding fuel
surcharge revenues $ 1,657,380 $ 1,538,701 Fuel surcharge revenues
185,954 151,958 Total operating
revenues 1,843,334 100.0 % 1,690,659 100.0 % Operating
expenses Rents and purchased transportation 947,145 51.4 % 846,238
50.1 % Salaries, wages and employee benefits 408,340 22.2 % 374,517
22.2 % Depreciation and amortization 95,959 5.2 % 91,001 5.4 % Fuel
and fuel taxes 87,006 4.7 % 74,179 4.4 % Operating supplies and
expenses 67,578 3.7 % 62,191 3.7 % Insurance and claims 26,463 1.4
% 21,862 1.3 % General and administrative expenses, net of asset
dispositions 29,389 1.6 % 21,025 1.1 % Operating taxes and licenses
10,744 0.6 % 11,665 0.7 % Communication and utilities 5,738
0.3 % 5,004 0.3 % Total operating expenses
1,678,362 91.1 % 1,507,682 89.2 %
Operating income 164,972 8.9 % 182,977 10.8 % Net interest expense
8,310 0.4 % 6,485 0.4 % Earnings before
income taxes 156,662 8.5 % 176,492 10.4 % Income taxes
56,277 3.1 % 67,067 3.9 % Net earnings $
100,385 5.4 % $ 109,425 6.5 % Average diluted shares
outstanding 110,628 113,363 Diluted
earnings per share $ 0.91 $ 0.97
J.B. HUNT TRANSPORT SERVICES, INC. Condensed
Consolidated Statements of Earnings (in thousands, except per
share data) (unaudited)
Nine Months Ended September
30 2017 2016 % Of % Of
Amount Revenue Amount
Revenue Operating revenues, excluding fuel
surcharge revenues $ 4,670,200 $ 4,448,709 Fuel surcharge revenues
529,208 385,688 Total operating
revenues 5,199,408 100.0 % 4,834,397 100.0 % Operating
expenses Rents and purchased transportation 2,624,707 50.5 %
2,381,547 49.3 % Salaries, wages and employee benefits 1,178,524
22.7 % 1,108,997 22.9 % Depreciation and amortization 281,198 5.4 %
269,717 5.6 % Fuel and fuel taxes 246,725 4.7 % 205,082 4.2 %
Operating supplies and expenses 190,085 3.7 % 173,222 3.6 %
Insurance and claims 76,930 1.5 % 58,384 1.2 % General and
administrative expenses, net of asset dispositions 74,597 1.4 %
61,570 1.3 % Operating taxes and licenses 32,329 0.6 % 34,156 0.7 %
Communication and utilities 16,337 0.3 %
15,063 0.3 % Total operating expenses 4,721,432
90.8 % 4,307,738 89.1 % Operating income
477,976 9.2 % 526,659 10.9 % Net interest expense 22,521
0.4 % 19,347 0.4 % Earnings before income
taxes 455,455 8.8 % 507,312 10.5 % Income taxes 154,499
3.0 % 192,778 4.0 % Net earnings $ 300,956
5.8 % $ 314,534 6.5 % Average diluted shares
outstanding 111,154 113,709 Diluted
earnings per share $ 2.71 $ 2.77
Financial Information By
Segment (in thousands) (unaudited)
Three Months Ended
September 30 2017 2016 % Of % Of
Amount Total Amount
Total
Revenue
Intermodal $ 1,048,187 57 % $ 969,654 57 % Dedicated 437,521
24 % 393,770 23 % Integrated Capacity Solutions 269,451 14 %
233,022 14 % Truck 92,632 5 % 97,154 6
% Subtotal 1,847,791 100 % 1,693,600 100 % Intersegment
eliminations (4,457 ) (0 %) (2,941 ) (0 %)
Consolidated revenue $ 1,843,334 100 % $ 1,690,659
100 %
Operating
income
Intermodal $ 109,130 66 % $ 116,885 64 % Dedicated 42,867 26
% 52,463 28 % Integrated Capacity Solutions 7,291 4 % 8,516 5 %
Truck 5,713 4 % 5,080 3 % Other (1) (29 ) (0 %) 33
0 % Operating income $ 164,972 100 % $ 182,977
100 %
Nine Months Ended September 30
2017 2016 % Of % Of Amount
Total Amount Total
Revenue
Intermodal $ 2,986,746 57 % $ 2,798,284 58 % Dedicated
1,241,899 24 % 1,134,861 23 % Integrated Capacity Solutions 701,335
14 % 619,956 13 % Truck 280,895 5 % 291,468
6 % Subtotal 5,210,875 100 % 4,844,569 100 % Intersegment
eliminations (11,467 ) (0 %) (10,172 ) (0 %)
Consolidated revenue $ 5,199,408 100 % $ 4,834,397
100 %
Operating
income
Intermodal $ 314,105 66 % $ 325,625 62 % Dedicated 136,195
29 % 147,700 28 % Integrated Capacity Solutions 11,520 2 % 30,186 6
% Truck 16,216 3 % 23,112 4 % Other (1) (60 ) (0 %)
36 0 % Operating income $ 477,976 100 % $ 526,659
100 % (1) Includes corporate support activity
Operating
Statistics by Segment (unaudited)
Three Months Ended September 30
2017 2016
Intermodal
Loads 516,260 489,109 Average length of haul 1,685 1,662
Revenue per load $ 2,030 $ 1,983 Average tractors during the period
* 5,461 5,279 Tractors (end of period) Company-owned 4,768
4,568 Independent contractor 773 714
Total tractors 5,541 5,282 Net change in trailing equipment
during the period 1,724 1,578 Trailing equipment (end of period)
87,305 82,821 Average effective trailing equipment usage 86,622
79,107
Dedicated
Loads 655,881 607,876 Average length of haul 177 177 Revenue
per truck per week** $ 4,196 $ 4,120 Average trucks during the
period*** 8,105 7,357 Trucks (end of period) Company-owned
7,792 6,936 Independent contractor 55 22 Customer-owned (Dedicated
operated) 549 414 Total trucks 8,396
7,372 Trailing equipment (end of period) 24,524 22,391
Average effective trailing equipment usage 24,914 22,939
Integrated
Capacity Solutions
Loads 236,796 239,399 Revenue per load $ 1,138 $ 973 Gross
profit margin 12.8 % 12.8 % Employee count (end of period) 899 769
Approximate number of third-party carriers (end of period) 54,900
50,100
Truck
Loads 90,520 97,052 Average length of haul 437 453 Loaded
miles (000) 39,516 43,865 Total miles (000) 47,292 52,317 Average
nonpaid empty miles per load 86.0 87.2 Revenue per tractor per
week** $ 3,524 $ 3,468 Average tractors during the period * 2,055
2,162 Tractors (end of period) Company-owned 1,340 1,384
Independent contractor 700 799 Total
tractors 2,040 2,183 Trailers (end of period) 7,538 7,572
Average effective trailing equipment usage 7,099 7,083
* Includes company-owned and independent contractor tractors
** Using weighted workdays *** Includes company-owned, independent
contractor, and customer-owned trucks
Operating Statistics by Segment
(unaudited)
Nine Months Ended September 30
2017 2016
Intermodal
Loads 1,484,138 1,424,733 Average length of haul 1,680 1,648
Revenue per load $ 2,012 $ 1,964 Average tractors during the period
* 5,301 5,206 Tractors (end of period) Company-owned 4,768
4,568 Independent contractor 773 714
Total tractors 5,541 5,282 Net change in trailing equipment
during the period 2,711 3,864 Trailing equipment (end of period)
87,305 82,821 Average effective trailing equipment usage 85,719
75,702
Dedicated
Loads 1,888,770 1,794,432 Average length of haul 178 175
Revenue per truck per week** $ 4,156 $ 4,021 Average trucks during
the period*** 7,737 7,280 Trucks (end of period)
Company-owned 7,792 6,936 Independent contractor 55 22
Customer-owned (Dedicated operated) 549 414
Total trucks 8,396 7,372 Trailing equipment (end of
period) 24,524 22,391 Average effective trailing equipment usage
24,126 22,657
Integrated
Capacity Solutions
Loads 714,923 614,334 Revenue per load $ 981 $ 1,009 Gross
profit margin 12.9 % 14.9 % Employee count (end of period) 899 769
Approximate number of third-party carriers (end of period) 54,900
50,100
Truck
Loads 283,053 288,392 Average length of haul 435 460 Loaded
miles (000) 123,080 132,562 Total miles (000) 147,227 157,526
Average nonpaid empty miles per load 86.1 86.6 Revenue per tractor
per week** $ 3,484 $ 3,432 Average tractors during the period*
2,103 2,202 Tractors (end of period) Company-owned 1,340
1,384 Independent contractor 700 799
Total tractors 2,040 2,183 Trailers (end of period) 7,538
7,572 Average effective trailing equipment usage 7,165 6,846
* Includes company-owned and independent contractor tractors
** Using weighted workdays *** Includes company-owned, independent
contractor, and customer-owned trucks
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Balance Sheets (in thousands)
(unaudited)
September
30, 2017 December 31, 2016
ASSETS Current assets: Cash and cash equivalents $ 7,707 $
6,377 Accounts receivable 858,720 745,288 Prepaid expenses and
other 140,164
194,016 Total current assets
1,006,591
945,681 Property and equipment 4,507,917 4,258,915
Less accumulated depreciation
1,632,108 1,440,124 Net
property and equipment 2,875,809
2,818,791 Other assets
171,523
64,516 $
4,053,923 $ 3,828,988
LIABILITIES & STOCKHOLDERS' EQUITY Current
liabilities: Trade accounts payable $ 493,585 $ 384,308 Claims
accruals 117,645 109,745 Accrued payroll 47,514 51,929 Other
accrued expenses 23,011
27,152 Total current liabilities
681,755
573,134 Long-term debt 1,084,801
986,278 Other long-term liabilities 68,564 64,881 Deferred income
taxes 746,833 790,634 Stockholders' equity
1,471,970
1,414,061 $ 4,053,923
$ 3,828,988
Supplemental Data (unaudited)
September 30, 2017
December 31, 2016 Actual shares outstanding at end of
period (000) 109,752
111,305 Book value per
actual share outstanding at end of period
$ 13.41 $ 12.70
Nine Months Ended September 30 2017
2016 Net cash provided by operating activities (000)
$ 628,549 $
683,963 Net capital expenditures (000)
$ 329,775 $ 358,754
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version on businesswire.com: http://www.businesswire.com/news/home/20171013005065/en/
J.B. Hunt Transport Services, Inc.David G. Mee,
479-820-8363Executive Vice President, Finance/Administration and
Chief Financial Officer
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