J. B Hunt reports Q1 2022 revenue of $3.5bn

J.B. Hunt

J.B Hunt has announced Q1 2022 results, with revenue increasing 33.0% y-o-y to $3.5bn. Operating income also rose by 61.0% y-o-y, to $334.3m. All segments contributed to y-o-y revenue increases.

According to J. B Hunt, operating income primarily increased primarily due to higher volumes, customer rate and cost recovery efforts, and further scaling of investments in technology, in addition to an approximately $18m increase in gains on the sale of equipment y-o-y. These items were partially offset by increases in rail and truck purchased transportation costs, professional driver and non-driver wages and benefits, hiring, and recruiting expense, and implementation costs for newly awarded business in both Dedicated Contract Services (DCS) and Final Mile Services (FMS) segments.

The Intermodal (JBI) segment reported a revenue increase of 36.0% y-o-y, reaching a value of $1.6bn. Operating income rose 87.0% y-o-y, to $201.0m. The company reported that operating income increased due to higher customer rate and cost recovery efforts and approximately $14m of increased gains on the sale of equipment compared to the prior year period. Rate and cost recovery efforts were partially offset by higher rail and third-party dray purchased transportation costs, increases in professional driver and non-driver wages and benefits, higher driver-recruiting costs, as well as costs stemming from inefficiencies in rail and port networks. Intermodal volumes increased 7.0% y-o-y, with eastern network loads increasing 10.0%, while transcontinental loads increasing 5.0%. Volumes early in the quarter were negatively impacted by network fluidity issues attributable to labour challenges, however as the quarter progressed, volume levels strengthened as customer unloading activity improved. According to J.B Hunt, rail network velocity continued to govern the company’s ability to capitalize on even greater intermodal demand.

The DCS segment reported a revenue increase of 28.0% y-o-y, reaching $741m. Operating income rose 4.0% y-o-y, to $77.1m. Within this segment, benefits from higher revenue and contracted indexed-based price escalators were mostly offset by increases in professional driver and non-driver wages and benefits, higher driver-recruiting costs, productivity headwinds due to COVID-related labour disruptions, and other costs related to the implementation of new, long-term contractual business.

The Integrated Capacity Solutions (ICS) segment reported a revenue of $675m, up 29.0% y-o-y. Operating income grew by 243.0% y-o-y, reaching $25.0m. Overall segment volumes increased 12.0% with truckload volumes increasing 15.0% versus the prior year period. Revenue per load increased 14.0% compared to the first quarter 2021 due to higher contractual and spot rates in our truckload business as well as changes in customer freight mix. Contractual volumes represented approximately 53.0% of the total load volume and 43.0% of the total revenue in the current quarter compared to 49.0% and 35.0%, respectively, in first quarter 2021.

The Truckload (JBT) segment reported revenue increases of 77.0% y-o-y, to $264m. Operating income increased 210.0% y-o-y, to $31.5m. According to J.B Hunt, volume for this segment was up 17.0 y-o-y total trailer count increased by approximately 3,000 units, or 36.0% versus the prior year period. Trailer turns in the quarter were down 13.0% from the prior period due to the onboarding of new trailers, freight mix and customer detention of equipment. Revenue per load excluding fuel surcharge revenue was up 47.0% on a 10.0% increase in length of haul. Both mix and same-store rate increases contributed to the increase in revenue quality.

The FMS segment reported revenues of $218m, up 8.0% y-o-y. This segment lost $0.2m in operating income compared to the year prior.  Revenue growth in the quarter was partially offset by supply-chain related constraints for goods in the primary markets served, in addition to internal efforts to improve revenue quality across certain accounts. Higher revenue was more than offset by increases in professional driver and non-driver wages and benefits, implementation costs for newly awarded business, third-party contract carrier expense, driver-recruiting costs, and professional fees related to the Zenith Freight Lines acquisition.

Source: J. B Hunt