J.B. Hunt Transport Services, Inc. Reports Earnings For The Second Quarter 2013

J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced second quarter 2013 net earnings of $87.7 million, or diluted earnings per share of 73 cents vs. second quarter 2012 net earnings of $80.5 million, or 67 cents per diluted share.

Total operating revenue for the current quarter was $1.38 billion, compared with $1.26 billion for the second quarter 2012. Load growth of 12% in Intermodal (JBI) and 29% in Integrated Capacity Solutions (ICS), helped drive a 12% and 20% increase in segment revenue, respectively. Dedicated Contract Services (DCS) segment revenue increased by 13% as new, large private fleet conversions continue to be implemented, while Truck (JBT) segment revenue decreased by 20% primarily from a smaller fleet and lower utilization. Current quarter total operating revenue, excluding fuel surcharges, increased 11% vs. the comparable quarter 2012.

Operating income for the current quarter totaled $147 million vs. $137 million for the second quarter 2012. The increase in operating income was primarily due to load growth, partially offset by $2.5 million of implementation expenditures in DCS for two previously announced private fleet conversion contracts, a $2.4 million write-off of abandoned shared technology costs, a $1.5 million loss on the destruction of equipment involved in two train derailments, increases in equipment costs, fewer gains on revenue equipment sales and higher driver recruiting and wage costs.

Interest expense in the current quarter decreased due to slightly lower debt levels and lower interest rates from a year ago. The effective income tax rate for the quarter was 37.88% compared to 38.25% in 2012 primarily from the realization of a deferred tax benefit on the sale of property during the current period. We expect our 2013 annual tax rate to be approximately 38.15%.

Segment Information:

Intermodal (JBI)
  • Second Quarter 2013 Segment Revenue: $855 million; up 12%
  • Second Quarter 2013 Operating Income: $110.7 million; up 19%

Overall volumes increased 12% over the same period in 2012 in an environment of moderating fuel prices and less seasonally volatile freight demand. Eastern network growth was 14% and transcontinental growth was 11% over the second quarter 2012. Revenue grew 12% with the effect of traffic mix, customer rate increases and fuel surcharges keeping revenue per load virtually flat compared to a year ago.

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