J. B. Hunt Transport's Earnings Triple

Shares rally as a fuel surcharge revenue and 'accelerating demand' spur better-than-expected results.
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J. B. Hunt Transport Services'

(JBHT) - Get Report

fourth-quarter earnings more than tripled from a year ago, helped by fuel surcharge revenue and a lower profit base in fourth quarter 2004 due to a reserve made for contingent tax liability.

Shares of J. B. Hunt Transport were recently up $1.65, or 7.3%, to $24.27 in reaction to the results, which beat Wall Street expectations.

The Lowell based company earned $65.34 million, or 41 cents a share, in the quarter, compared to $19.78 million, or 12 cents a share, a year ago. Earnings were reduced by $33.6 million, or 20 cents a share in the fourth quarter 2004 because of reserve created for contingent tax liability. Analysts surveyed by Thomson First Call were expecting earnings of $58.09 million, or 36 cents a share in the most recent quarter.

The transportation service company's revenue increased 11.36% from last year to $858.38 million due to better demand, higher than the Wall Street consensus estimate of $856.35 million.

"Freight activity in February through June 2005 was not as robust as 2004 had been, but August through the end of the year saw accelerating demand in Intermodal, DCS and Truck. As a result, profitability improved, resulting in a record year of revenue and profits." said Kirk Thompson, president and CEO.

Overall operating ratio (operating expenses to sales) including fuel surcharge revenue improved 70 basis points to 87.6% from a year ago.

Operating ratio for its Dedicated Contract Services segment was at 87.1% for the fourth quarter, a 110 basis point improvement over the fourth quarter of 2004. The Truck business reported operating ratio 85.8% that improved from 88.3% in the comparable period a year ago. The operating ratio for the Intermodal segment was 89.6% for the fourth quarter compared to 88.6% for the same quarter a year ago.

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