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J.B. Hunt Transport (JBHT) Q1 Earnings Top, '16 View Intact

J.B. Hunt Transport Services Inc. JBHT reported mixed first-quarter 2016 financial results wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed the same.

This transportation company’s earnings came in at $0.88 per share, beating the Zacks Consensus Estimate by 3 cents. Earnings were also up 12.8% on a year-over-year basis.

 

 

Total operating revenues increased 6% year over year to $1.53 billion but fell short of the Zacks Consensus Estimate of $1.55 billion. Operating income in the quarter improved 8% year over year to $168 million.

The Intermodal (JBI) division reported quarterly revenues of $895 million, up 6% year over year. Load volumes in the segment climbed 12%. Revenue per load improved 2% (excluding fuel surcharge revenue). Meanwhile, operating income decreased 1% year over year to $101.3 million. Rise in costs relating to rail purchased transportation, equipment ownership, driver recruitment and retention hurt segmental results.

Dedicated Contract Services (DCS) revenues grew 4% year over year to $358 million in the reported quarter on higher number of revenue-generating trucks. The average truck count stood at 7,196, up 5%. Operating income increased 25% year over year to $44.8 million mainly on the back of higher revenues, improved asset utilization and lower dependence on third-party carriers.

Integrated Capacity Solutions (ICS) revenues improved 12% year over year to $183 million on the back of a 45% rise in volumes. On a year-over-year basis, revenue per load fell 23% primarily due to lower fuel prices and weak transactional customer demand. Operating income surged 63% year over year to $10.8 million.

Truck (JBT) revenues were up 5% year over year to $96 million. At the end of the reported quarter, the company operated 2,270 tractors, up 12.3% year over year. Operating income improved 8% to $9.2 million.

Liquidity

At the end of the reported quarter, cash and cash equivalents were $5,992 million compared with approximately $5,566 million at 2015-end. Long-term debt stood at $967.8 million compared with $1,005 million at the end of 2015.

View Unchanged

The company expects the JBI, DCS, ICS and JBT segments to contribute 60%, 22%, 12% and 6%, respectively, to total revenues in 2016. Total revenues for 2016 are still projected to grow in the band of 9% to 12% over 2015 levels. The company stated that it will adjust the 2016 outlook, if needed, after it releases second-quarter results. Meanwhile, capex for 2016 is still estimated at $537 million.

Zanks Rank & Key Picks

J.B. Hunt currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the transportation space are Covenant Transportation Group, Inc. CVTI, China Eastern Airlines Corp. Ltd. CEA and Deutsche Lufthansa Aktiengesellschaft DLAKY. All the three stocks sport a Zacks Rank# 1 (Strong Buy).

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CHINA EASTN-ADR (CEA): Free Stock Analysis Report
 
LUFTHANSA -ADR (DLAKY): Free Stock Analysis Report
 
HUNT (JB) TRANS (JBHT): Free Stock Analysis Report
 
COVENANT TRANS (CVTI): Free Stock Analysis Report
 
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