J.B. Hunt Transport Services Inc. on Monday reported first-quarter earnings of $243.3 million, up 66% from a year ago.
Results beat Wall Street estimates with significant revenue growth.
Revenue increased 33% to $3.49 billion compared with the same period last year. It was $3.04 billion excluding fuel surcharges.
All divisions of the business saw significant income and revenue growth, excluding final mile services, which reported a loss from increased costs related to wages, contract expenses and fees from the recent acquisition of Zenith Freight Lines, a transporter for Bassett furniture company.
In the three months that ended March 31, earnings per share rose to $2.29 from $1.37 last year. Analysts on average had expected J.B. Hunt to earn $1.94 per share, according to figures compiled by Thomson Reuters.
Supply-chain issues and labor challenges continue to be a headache for the Lowell-based carrier, but executives indicated in an afternoon conference call that blue skies are ahead with inclement weather and cases of the omicron variant of covid-19 subsiding.
Shelley Simpson, chief commercial officer at J.B. Hunt, said while the current market dynamics are likely to remain for some time, "I also believe our opportunity to provide efficiencies for our customers is greater than any point in the past two years."
A large piece of that is within the intermodal segment that comprises about half of the carrier's earnings. Transporting containers via rail has grown in popularity as companies look to secure capacity, while reducing costs. J.B. Hunt has plans to add up to 150,000 containers to its intermodal fleet in the next three to five years as part of a recent deal with longtime collaborator BNSF Railway Co.
Despite labor challenges and covid-19-related disruptions, J.B. Hunt's intermodal segment had a 7% increase in volumes compared with totals last year. Gross revenue increased 36% to $1.6 billion, reflecting a 7% increase in volume and 28% increase in gross revenue per load. Operating income surged 87% to $201 million in the first quarter from higher customer rate and cost recovery efforts, as well as $14 million of increased gains on the sale of equipment over last year.
The Integrated Capacity Solutions, or asset-light brokerage, segment had strong growth driven by customers and increased access to J.B. Hunt 360, the company's digital freight platform. Contract and spot rates also increased. Revenue rose 29% to $675 million on increased segment and trucking volumes. Operating income was $25 million in the quarter compared with $7.3 million last year. The segment's carrier base grew 36% from a year ago.
The Dedicated Contract Services, or fleet outsourcing, segment had higher utilization rates that bolstered revenue. However, productivity, excluding fuel surcharges, was flat compared with a year ago. Despite labor disruptions early in the quarter and a greater number of open trucks as a result of a tight labor market, revenue increased 28% to $741 million and operating income rose 4% to $77.1 million, respectively.
The Final Mile Services segment showed improved revenue and income driven by the addition of multiple customer contracts and the acquisition of Zenith Freight Lines. Revenue increased 8% to $218 million. J.B. Hunt reported an operating loss of $200,000 in the quarter compared with a profit of $8.5 million a year ago.
The trucking segment saw significant growth as revenue climbed 77% to $264 million on increased loads and higher rates, which improved margins. Operating income was $31.5 million in the quarter versus $10.2 million last year.
J.B. Hunt shares fell 56 cents, or less than 1%, to close Monday at $171.45.