J.B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2013

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J.B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2013

  • First Quarter 2013 Revenue:$1.29 billion; up 11%
  • First Quarter 2013 Operating Income:$125 million; up 7%
  • First Quarter 2013 EPS:61 cents vs. 57 cents

LOWELL, Ark.--(BUSINESS WIRE)-- J. B. Hunt Transport Services, Inc., (NAS: JBHT) announced first quarter 2013 net earnings of $73.3 million, or diluted earnings per share of 61 cents vs. first quarter 2012 net earnings of $67.7 million, or 57 cents per diluted share.

Total operating revenue for the current quarter was $1.29 billion, compared with $1.17 billion for the first quarter 2012. Load growth of 13% in Intermodal (JBI) and 47% in Integrated Capacity Solutions (ICS), helped drive 15% and 26% increases in segment revenue, respectively. Dedicated Contract Services (DCS) segment increased operating revenue by 9%, primarily from new long-term contracts currently being implemented, while Truck (JBT) segment revenue declined primarily from a 21% reduction in fleet size.


Operating income for the current quarter totaled $125 million vs. $117 million for the first quarter 2012. Combined, JBI and ICS operating income increased by approximately $18 million on higher load volume, improved freight mix and overhead cost controls. The increase in operating income was partially offset by higher equipment costs in the asset-based business units, higher claims costs from two old claims shared by all business units, contract implementation costs related to new customers for DCS and higher employee costs with lower asset utilization for JBT.

Net interest expense for the current quarter decreased by $0.7 million due to lower debt levels. The effective income tax rate for the quarter was consistent with last year at 38.25%.

Segment Information:

Intermodal (JBI)

  • First Quarter 2013 Segment Revenue:$796 million; up 15%
  • First Quarter 2013 Operating Income:$ 96.8 million; up 22%

Steady first quarter demand drove load growth of 13% over the prior year. Improved service levels and tighter capacity in the truck market contributed to our Eastern network growth of 19% and transcontinental growth of 10% compared to the prior year. Overall revenue grew 15% as a result of the volume growth and higher revenue per load, which is a combination of customer rates, fuel surcharges and freight mix.

Operating income increased 22% over the prior year. Increased equipment and maintenance costs, increased dray costs and higher dray purchase transportation costs were offset with the combination of steady demand and load growth, consistent and improved rail service, improved execution on dray movements and increased revenue per load. The current period ended with approximately 60,300 units of trailing capacity and 3,700 power units available to the dray fleet.

Dedicated Contract Services (DCS)

  • First Quarter 2013 Segment Revenue:$279 million; up 9%
  • First Quarter 2013 Operating Income:$21.9 million; down 22%

DCS revenue increased 9% during the current quarter while revenue, excluding fuel surcharges, increased 10%. Productivity, revenue per truck per week, excluding fuel surcharges, was up approximately 2% vs. first quarter 2012. A net additional 633 revenue producing trucks were added over the same period 2012, primarily from new accounts.

Operating income decreased by 22% from a year ago primarily due to increased equipment and maintenance costs, lower gains on equipment sales, increased bad debt expense and approximately $1.7 million in contract implementation costs for new long-term customers. These implementation costs include, but are not limited to, driver and management hiring costs and relocation, personnel travel costs, equipment repositioning costs, technology design and integration, and telecommunication and operational system infrastructure. These exceptionally large private fleet conversions will take approximately 6 to 8 months to fully implement. Additional implementation costs expected to be expensed in the coming periods are estimated to be $2.5 million.

Integrated Capacity Solutions (ICS)

  • First Quarter 2013 Segment Revenue:$122 million; up 26%
  • First Quarter 2013 Operating Income:$5.2 million; up 27%

ICS revenue increased 26% vs. first quarter 2012, mostly due to a 47% increase in load volume and higher pricing in our transactional business. Volumes grew faster than revenue primarily due to a change in freight mix driven by customer demand. Both transactional and contractual business continued to grow, however the contractual business grew faster to become 69% of total volumes vs. 59% in first quarter 2012.

Operating income increased 27% over the same period in 2012 primarily from the increased revenue and improved overhead cost controls. Gross profit margin declined to 13.0% in the current quarter vs. 14.3% at the same time last year due to increased rates paid to carriers from tighter supply and a competitive brokerage environment. ICS's carrier base increased 9% and our employee count increased 16% compared to first quarter 2012.

Truck (JBT)

  • First Quarter 2013 Segment Revenue:$102 million; down 21%
  • First Quarter 2013 Operating Income:$1.1 million; down 78%

JBT revenue decreased 21% compared to the same quarter 2012 primarily from a 21% reduction in fleet size and lower utilization per truck. Excluding fuel surcharges, revenue for the current quarter decreased by 21%. Rate per loaded mile, excluding fuel surcharges, increased 3.8% over the same period last year but on a 9.8% shorter length of haul. Rates from consistent shippers improved 0.5% year-over-year. At the end of the current quarter, our tractor count was 2,011 compared to 2,561 in first quarter 2012.

Operating income for the current quarter decreased 78% compared to the same quarter of 2012. Increased rate per loaded mile, lower fuel costs and lower claims costs were offset by increases in driver and independent contractor costs per mile, higher office salaries per tractor, higher maintenance and equipment costs per unit, and fewer gains on equipment sales compared to the first quarter of 2012.

Cash Flow and Capitalization:

As of March 31, 2013, we had a total of $593 million outstanding on various debt instruments compared to $702 million on March 31, 2012, and $685 million on December 31, 2012.

Our net capital expenditures for the first quarter 2013 approximated $115 million compared to $84 million for the first quarter 2012. As of March 31, 2013, we had cash and cash equivalents of $5.7 million.

We did not purchase any shares of our common stock during the quarter. As of March 31, 2013, we had approximately $453 million remaining under our share repurchase authorization. Actual shares outstanding on March 31, 2013 approximated 117 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, 2012. We assume no obligation to update any forward-looking statement to the extent we become aware 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 March 31
20132012
% Of% Of
Amount RevenueAmount Revenue
 
Operating revenues, excluding fuel surcharge revenues$1,038,940$938,683
Fuel surcharge revenues252,647 227,239 
Total operating revenues1,291,587100.0%1,165,922100.0%
 
Operating expenses
Rents and purchased transportation644,53349.9%556,11747.7%
Salaries, wages and employee benefits263,72420.4%250,04421.4%
Fuel and fuel taxes116,5609.0%120,55410.3%
Depreciation and amortization60,7304.7%56,1204.8%
Operating supplies and expenses44,9143.5%39,8113.4%
Insurance and claims12,7701.0%11,0451.0%
General and administrative expenses, net of asset dispositions10,9850.8%3,9950.4%
Operating taxes and licenses7,5130.6%7,1420.6%
Communication and utilities4,819 0.4%4,497 0.4%
Total operating expenses1,166,548 90.3%1,049,325 90.0%
Operating income125,0399.7%116,59710.0%
Net interest expense6,256 0.5%6,987 0.6%
Earnings before income taxes118,7839.2%109,6109.4%
Income taxes45,434 3.5%41,926 3.6%
Net earnings$73,349 5.7%$67,684 5.8%
Average diluted shares outstanding119,825 119,750 
Diluted earnings per share$0.61 $0.57 
 
 
 
Financial Information By Segment
(in thousands)
(unaudited)
 
Three Months Ended March 31
20132012
% Of% Of
Amount TotalAmount Total
 

Revenue

 
Intermodal$796,26262%$694,11660%
Dedicated279,08322%255,85222%
Integrated Capacity Solutions122,3219%97,0528%
Truck101,845 8%128,156 11%
Subtotal1,299,511101%1,175,176101%
Intersegment eliminations(7,924)(1%)(9,254)(1%)
Consolidated revenue$1,291,587 100%$1,165,922 100%
 
 

Operating income

 
Intermodal$96,79477%$79,43068%
Dedicated21,94618%28,14924%
Integrated Capacity Solutions5,1744%4,0644%
Truck1,0951%4,8844%
Other (1)30 0%70 0%
Operating income$125,039 100%$116,597 100%
 
 
(1) Includes corporate support activity
 
   
 
Operating Statistics by Segment
(unaudited)
 
Three Months Ended March 31
20132012
 

Intermodal

 
Loads367,766324,142
Average length of haul1,6911,704
Revenue per load$2,165$2,141

Average tractors during the period *

3,6653,185
 
Tractors (end of period)
Company-owned3,2302,956
Independent contractor482 299 
Total tractors3,7123,255
 
Net change in trailing equipment during the period1,343331
Trailing equipment (end of period)60,30554,837
Average effective trailing equipment usage55,93850,596
 
 

Dedicated

 
Loads398,299351,187
Average length of haul198208
Revenue per truck per week**$4,149$4,069
Average trucks during the period***5,3224,881
 
Trucks (end of period)
Company-owned5,1194,600
Independent contractor1318
Customer-owned (Dedicated operated)363 244 
Total trucks5,4954,862
 
Trailing equipment (end of period)17,46611,163
Average effective trailing equipment usage17,73712,435
 
 

Integrated Capacity Solutions

 
Loads99,92368,138
Revenue per load$1,224$1,424
Gross profit margin13.0%14.3%
Employee count (end of period)441379
Approximate number of third-party carriers (end of period)32,60029,800
 
 

Truck

 
Loads Read Full Story

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