Hub Group produced turnover of over $4bn in 2017. With higher growth in both its Hub and Mode segments, the company’s revenues were up 12.9%. Part of this growth can be attributed to its purchase of Estenson Logistics, which closed on July 1. Estenson had produced revenues of around $250m in 2016. Hub Group’s operating income of $96.6m represented a decrease of 22.0%.
Reportedly, the biggest factor driving the decrease in operating income was a $29 million decline in intermodal gross margin. During most of 2017, intermodal cost increases were much higher than customer price increases. Hub segment operating income decreased 25% and Mode segment operating income decreased 13%.
Hub segment revenues were 13.6% higher in the year. Its fourth quarter intermodal revenue increased 8% to $502.7 million reflecting a 2% increase in volume and an increase in fuel revenue and freight rates. Its truck brokerage revenues were 22% higher in the quarter, with volumes 2% higher and its fuel, price and mix combined were up 20%.
Mode segment revenues surpassed $1bn for the year after growing by 8.5%.
Dave Yeager, Hub’s Chief Executive Officer, said “Our 2017 revenue of $4 billion is one significant milestone toward achieving our target of $6 billion in revenue in the next five years. We intend to achieve $6 billion in revenue through organic growth initiatives and acquisitions in both our core business and new service offerings.”
Source: Hub Group
