J.B. Hunt’s operating income falls 6.8% in Q2


J.B. Hunt has reported its Q2 financial results for 2017. Revenues were up 6.9% year-over-year to $1,727m, however, operating income fell 6.9% year-over-year to $164m and net earnings were down 6.8% to $98m.

J.B. Hunt said volume growth and increases in revenue producing truck counts increased sales in the period. However, this was more than offset by lower customer rates, increases in rail and over the road purchased transportation costs, start-up costs associated with new DCS contracts, higher driver wages and recruiting costs, increased insurance and claims costs, increased equipment and facility maintenance costs and higher technology costs.

In its largest segment, Intermodal, revenues grew 7.3% to $1,001m. It saw load volumes grow by 5% in the period, with transcontinental loads up 10%. Operating income also increased by 3.9% as increased rail purchased transportation, employee costs and technology and modernisation costs offset volume growth.

Its Dedicated Contract Services (DCS) saw 7.6% growth to $411m. Operating income fell 3.8% to $49m. Productivity gains in existing contracts were offset by low productivity in new contracts, as well as added employee and insurance costs in the year.

The Integrated Capacity Solutions (ICS) segment grew by 9.2% to $222m. The segment made a loss of $0.2m (2016: +$10.9m). Volumes increased by approximately 20%, but revenue per load decreased by 9% as a result of freight mix changes. Additional fixed costs and insurance claims decreased its profits.

Finally, its truck segment saw a fall in revenues of 3.8% to $95m. It made an operating profit of $5.6m, a fall of 37.2% year-over-year. As with other segments, employee-related costs, such as increased pay and hiring costs, dampened its results.

Source J.B. Hunt

GSCi

The world's largest collection of global supply chain intelligence

  • quickly and easily search and gain invaluable insight into the logistics industry
  • Empower everyone from business development executives to CEO level
  • Enhance the role of the market research department
Loading...
Loading...