J.B. Hunt registers quarterly increase
Posted on Tuesday, July 15, 2008
URL: http://www.nwanews.com/adg/Business/231431/
The power of the railroad bolstered J. B. Hunt Transport Services Inc. ’s second-quarter performance.
The carrier’s strong railto-truck segment generated 51 percent of the second-quarter revenue in an environment in which diesel fuel cost nearly double what it did in 2007.
The Lowell-based business reported late Monday afternoon a profit of $ 50. 6 million, or 39 cents per share, for the quarter that ended June 30. That’s down 21 percent compared with $ 63. 86 million, or 45 cents per share, for the same quarter in 2007.
The diversified carrier beat the average earnings estimate of 36 cents per share from 15 analysts surveyed by Thomson Financial.
It reported a 14 percent increase in revenue at $ 977. 34 million, compared with $ 855. 86 million for the same year-ago quarter.
The carrier said in comparing results, its 2007 performance included a $ 10. 3 million tax settlement award, which translated into a 24. 8 percent income tax rate.
“When diesel goes over $ 4 a gallon, it’s good to have the country’s largest intermodal business,” said Donald Broughton, a transportation analyst with Memphis-based Avondale Partners investment bank.
Broughton said in the yearover-year fuel comparison that truckers were paying about $ 4. 43 per gallon in the second quarter, compared with a national average of $ 2. 82 per gallon in the second quarter of 2007.
The analyst said the carrier’s operating ratio of 90. 4 was commendable, even though it was worse than the 88. 8 J. B. Hunt posted in the same year-ago period.
The operating ratio is a measure of operating costs as a percentage of operating revenues. The lower the ratio, the better the carrier’s performance.
Broughton said it didn’t matter that J. B Hunt had only $ 1. 3 million in cash to begin the third quarter, because it generated enough cash to pay down debt in the second quarter. The carrier reported using more than 35, 000 containers, or special trailers that move freight on ships, railroad and trucks, and it said most of the growth in equipment was “to support additional intermodal business.” J. B. Hunt said higher fuel surcharges also boosted its performance. Fuel surcharge revenue grew 88 percent to $ 214. 04 million in the quarter, compared with $ 113. 29 million in the same period last year.
“ We continue to offer our customers supply-chain solutions that best suit their service an cost parameters without bias toward a particular mode or asset class, ’’ Kirk Thompson, the company’s president and chief executive officer, said in a news release. On the expense side, J. B. Hunt saw rents and purchased transportation increase, along with fuel and fuel taxes. Shares of J. B. Hunt rose 3 cents, or 0. 09 percent, to $ 32. 51 per share Monday on the Nasdaq. Its stock has traded as high as $ 36. 32 and as low as $ 23. 28 over the last year.
To contact this reporter: lwhalen@arkansasonline. com