J.B. Hunt Q2 Profit Drops 21%; Revenues Up 14%

(RTTNews) - Transportation provider JB Hunt Transport Services Inc. (JBHT | Quote | Chart | News | PowerRating) Monday reported a 21% decline in second-quarter earnings as the year-ago quarter included a one-time tax benefit. Earnings, however, beat Street estimates. Revenues increased 14%, helped by excellent performance by major business segments and came in above the Street expectation.

Second-quarter net income decreased 21% to $50.60 million from $63.86 million in the same quarter last year. On a per-share basis, earnings dropped to $0.39 from $0.45 last year.

Fifteen analysts surveyed by First Call/Thomson Financial had a consensus earnings estimate of $0.36 per share for the second quarter.

Results for the 2007 second quarter included a benefit of $10.3 million or $0.07 per share net of income taxes from settlement of a tax adjustment.

JB Hunt's competitor, Landstar System Inc. (LSTR | Quote | Chart | News | PowerRating) is scheduled to report second-quarter results on Wednesday, with analysts forecasting earnings of $0.56 per share.

Lowell, Arkansas-based JB Hunt recorded total operating revenues of $977.34 million for the quarter, up 14% from $855.86 million recorded in the comparable quarter a year earlier. Excluding fuel surcharge revenues, second quarter revenues increased 3% from the last-year quarter.

Ten Street analysts were looking for revenues of $925.40 million for the quarter.

Segment-wise, Intermodal Revenue for the quarter increased 28% to $496 million, with a 22% growth in operating income that totaled $66.2 million. Revenue from the Dedicated Contract Services segment improved 3% 243 million, with operating income down 11% to $22.2 million. Operating income in the Truck segment plunged 79% to $3.4 million on a 14% decline in revenue. Second-quarter revenue from the Integrated Capacity Solutions segment surged to $53 million and operating income jumped to $2.3 million.

Operating income for the second quarter was $94.05 million, compared to $96.23 million in the year-ago quarter.

Total operating expenses increased to $883.29 million from $759.63 million in the second quarter of 2007.

Kirk Thompson, JB Hunt's CEO, commented, "We continue to offer our customers supply chain solutions that best suit their service and cost parameters without bias toward a particular mode or asset class. Importantly, this value enhancing strategy has allowed our customers to partially mitigate the impact of historically higher fuel prices by growing their use of intermodal vs. truckload."

On June 13, 2008, analysts at Robert W Baird reiterated their 'outperform' rating on JB Hunt and raised the target price to $41 from $37.

Net income for the first six months of the year declined to $87.02 million or $0.68 per share from the prior-year period, while revenue advanced to $1.856 billion from $1.653 billion in the previous year.

As on June 30, 2008 J.B Hunt had total cash and cash equivalents of $1.26 million, compared to $14.96 million as at December 31, 2007.

JBHT ended Monday's trading at $32.51, up $0.03 or 0.09%, on a volume of about 2.48 million shares. The stock has been moving in a range of $23.28 to $36.32 for the past twelve months, on a three-month average volume of about 2.33 million shares.

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