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story.lead_photo.caption Graphs showing information about J.B. Hunt's Fourth quarter

J.B. Hunt Transport Services Inc. on Thursday reported net income of $385.3 million for the fourth quarter, a 228 percent jump from a year ago led by an estimated benefit from the new federal tax structure.

The Lowell-based transportation firm said its results for the quarter included a $309.2 million decrease in income taxes, a figure derived "from our reasonable estimate of the change in future tax rates on deferred tax balances as of Dec. 31."

Net income for the same three-month period a year ago was $117.6 million.

Earnings per share of $3.48 also surged from $1.05 a year ago. J.B. Hunt's quarterly revenue of $2 billion was a 16 percent increase from the year-ago period and just topped analyst expectations of $1.9 billion for the quarter.

Brad Delco, a transportation analyst with Stephens Inc. in Little Rock, said the company produced good results to close the year. J.B. Hunt shares rose 80 cents to close Thursday at $121.45.

"There were some unique, one-time charges that created some noise in the quarter in terms of comparing results to the prior period or prior-year results," Delco said. "But if you exclude the tax benefit as well as some other unique charges, I would say operationally, these results were in line with, to slightly better than, my and the Wall Street's expectations."

In addition to the estimated tax benefit, J.B. Hunt's net income for the quarter included a $20.3 million charge for a cash advance to purchase new trailer equipment from a manufacturer that will not meet delivery. There also was an $18.6 million charge for an increase in reserves to cover insurance and claims.

Revenue from the company's intermodal segment -- which accounts for about 57 percent of J.B. Hunt's business -- increased 10 percent to $1.1 billion during the fourth quarter. The company attributed the increase to a 5 percent rise in the number of loads delivered and an increase in revenue per load. However, increased costs to attract and retain drivers, insurance claims and inefficiencies in the rail networks contributed to operating income falling 25 percent to $93.3 million.

Revenue in the brokerage division increased 40 percent based on a 19 percent increase in revenue per load and a 17 percent rise in the number of loads delivered. The growing division also produced an 86 percent increase in operating income -- earnings before interest and taxes are deducted -- to $11.3 million.

"We haven't seen revenue grow at that rate since first quarter of 2009," Delco said.

Revenue from J.B. Hunt's dedicated contract business grew 20 percent, which the company said was the result of new customer accounts and improved asset utilization. Higher driver wages, recruiting costs and ownership costs were all part of a 39 percent drop in operating income.

There was a 1 percent revenue increase in the company's trucking division as well, but a per-mile rate increase for customers was offset by a decrease in load count. The trucking division hauled 87,538 loads during the fourth quarter compared with 96,906 a year ago. Operating income in the trucking segment fell 5 percent to $6.4 million, according to J.B. Hunt.

J.B. Hunt's overall operating income of $145.8 million, separate from estimated tax benefit, in the quarter was down 25 percent from $194.4 million a year ago. Operating expenses during the three-month period climbed to $1.8 billion, which was about a $300 million increase from the fourth quarter of 2016. Expenses from salary and wages during the quarter also increased to $429.9 million, up from $360.2 million a year ago.

In addition to fourth-quarter results, J.B. Hunt announced its full-year performance Thursday.

The company's revenue of $7.2 billion was a 9.7 percent increase from $6.6 billion in 2016. Net income of $686.3 million -- which includes the tax benefit -- also increased from $432.1 million a year ago. Earnings per share grew from $3.81 in 2016 to $6.18 in 2017.

"Good results, all things considered, excluding some of these unique events," Delco said. "But more than anything, good fundamentals in the industries in which they're competing, which will likely mean better results in the future."

Business on 01/19/2018

Print Headline: Tax benefit buoys J.B. Hunt's 4Q

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