J.B. Hunt has announced strong Q1-20 results. The company’s total revenue for the quarter was $2.28bn an increase of 9% compared with $2.09bn in Q1-19. Total operating income totalled $154.7m in Q1-20 versus $167.8m in Q1-19, down by 8%. Q1-20 operating income included a $12.3m charge for a one-time bonus to employee drivers and certain personnel at field operations and customer facilities supporting the drivers who have kept the country’s freight moving during the COVID-19 pandemic.
Intermodal (JBI) segment saw revenue grow by 6% to $1.15bn. Overall, intermodal volumes increased by 7% compared to Q1-19. Eastern network loads grew 1%, while Transcontinental loads grew by 11%. Through February, both tractor and container utilisation improved year-over-year as overall volume increases drove efficiencies in both the rail and dray network. COVID-19 volume related disruptions began to materialise in March and escalated through the end of the quarter. Operating income decreased by 1% to $102m. Q1 revenue increases were offset by increases in rail purchased transportation costs, including the previously disclosed $8.2m accrual related to its adjusted calculation of the revenue divisions owed to BNSF.
Dedicated Contract Services (DCS) segment revenue increased by 10% to $542m over the prior year primarily from additional customer contracts and higher fleet utilisation. Operating income increased by 46% to $73m from a year ago, due to increased productivity of the fleet and the absence of any material implementation or weather-related costs.
The newly reported Final Mile Services (FMS) segment increased revenue by 39% over the prior year, reaching $154m, primarily from the February 2019 and December 2019 acquisitions. Operating income decreased to -$3.3m primarily from increased investments to expand the FMS network, increased costs related to the temporary suspension of operations at several of its customer’s sites as a result of COVID-19, higher bad debt expense and acquisitions expenses.
Integrated Capacity Solutions (ICS) segment revenue increased 12% to $335m, primarily from a 2% increase in load growth and a favourable change in customer freight mix. Contractual volumes represented approximately 74% of the total load volume and 64% of the total revenue in the current quarter compared to 68% and 51%, respectively, in Q1-19. Operating income decreased by $26m to -$18.9m, compared to Q1-19. This is been attributed to a lower gross profit margin, increased costs to expand capacity and functionality of the Marketplace for J.B. Hunt 360, higher personnel costs, and increased digital marketing and advertising costs.
Truck (JBT) segment revenue increased 3% to $105m, as a result of a 15% increase in load growth, offset by lower rates and changes in customer mix. At the end of the period, JBT operated 1,887 tractors and 7,391 trailers. Operating income decreased 75% year-on-year to $2m. Benefits from the increased load count were offset by an increase in purchased transportation expense, lower rates, higher trailing related costs and increased technology spending.
Source: J.B. Hunt
