“‘Simply stated, we’re in a freight recession.’”
Trucking and transportation firm J.B. Hunt Transport Services Inc. reported late Monday first-quarter revenue and income that fell beneath expectations, as volumes and income per truckload declined amid a “freight recession.”
“To start, we’re in a challenging freight environment where there is deflationary price pressure for an industry that continues to face inflationary cost pressures,” President Shelley Simpson stated within the post-earnings convention name with analysts, in response to an AlphaSense transcript.
Simpson stated, nevertheless, that primarily based on an analysis of how carriers can carry out within the present setting, it could be “very difficult” for spot pricing to go considerably decrease.
“I’m not suggesting we’ve completely found bottom, but we have seen a more leveling out,” Simpson stated.
J.B. Hunt’s
JBHT,
inventory slipped 0.2% in afternoon buying and selling Tuesday, and has swung between a lack of as a lot as 1.5% to a acquire of 1.9% in intraday buying and selling.
Net earnings for the quarter to March 31 was $197.8 million, or $1.89 a share, down from $243.3 million, or $2.29 a share, in the identical interval a yr in the past. That missed the typical analyst estimate compiled by FactSet for earnings per share of $2.01.
Revenue declined 7.4% to $3.23 billion, beneath the FactSet consensus of $3.42 billion, as income per load fell 17%.
“These declines were primarily driven by lower freight volumes, moderating pricing trends, and inflationary cost pressures, particularly in the areas of salaries and wages, insurance and claims, and parts and maintenance-related expenses,” stated Chief Financial Officer John Kuhlow.
Intermodal income fell 5%, built-in capability options income sank 42%, final-mile companies income slipped 4% and truckload income was down 10%, whereas devoted contract companies income elevated 13%.
Intermodal President Darren Field stated that whereas demand for intermodal companies was “tempered” given decrease imports and elevated stock throughout the provision chain, he remained optimistic in regards to the future.
“There is going to come a day when imports improve from where they are,” Field stated. “When will that be? I don’t know the answer to that, but it will improve, and we stand to gain tremendously when that happens.”
Ten of the 27 analysts surveyed lowered their stock-price targets after the outcomes, whereas one analyst lifted their goal, in response to FactSet, as the typical goal fell to $189.64 from $193.22 as of the tip of March.
Evercore ISI analyst Jonathan Chappell lowered his stock-price goal to $191 from $200 however stored his score at outperform.
“Although there were widespread expectations of EPS misses and potential lower guidance ranges throughout the transport earnings season, [J.B. Hunt’s] early reporting date and vast multi-modal service offerings confirms tough market conditions across the board,” Chappell wrote in a word to shoppers.
He stated the nice news is that the corporate continues to be investing via the underside of the cycle, successful market share and retaining 15% to twenty% of intermodal capability for when financial and trade headwinds “inevitably” shift to tailwinds.
Meanwhile, JPMorgan’s Brian Ossenbeck stored his score at impartial however nudged up his stock-price goal to $200 from $199, saying that the corporate really carried out “much better than we expected” as fading congestion charges that introduced down revenue per container didn’t crush margins.
“We agree with management that it is only a question of when, not if the cycle turns again and the volume spigot opens up again,” Ossenbeck wrote.
J.B. Hunt’s inventory has edged up 1.1% yr to this point, whereas the Dow Jones Transportation Average
DJT,
has superior 6.6% and the Dow Jones Industrial Average
DJIA,
has tacked on 2.6%.
Source web site: www.marketwatch.com
