J.B. Hunt reports 3.0% drop in annual profits as revenues climb 5.0%

Fourth quarter 2020 revenue increased 12.0%


Post a Press Release


Browse Top 1000 Lists


J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced Q4, 2020 net earnings of US$154.0 million, vs. Q4, 2019 net earnings of US$144.7 million. Total operating revenue for the current quarter was US$2.74 billion, compared with US$2.45 billion for Q4, 2019. Revenue growth in the quarter was driven primarily by Integrated Capacity Solutions (ICS) and Truck (JBT) segments, which grew 56.0% and 50.0% respectively, as both segments were able to leverage capacity in the Marketplace for J.B. Hunt 360 for customers during the quarter. Final Mile Services (FMS) revenue grew 30.0%, driven by the December 2019 acquisition and new contractual business onboarded throughout 2020. Dedicated (DCS) revenue grew 3.0%, primarily from a 9.0% increase in loads and a modest increase in the fleet. Revenue growth was partially offset by a 1.0% decline in revenue in Intermodal (JBI), and a 34.0% decline in fuel surcharge revenue. Current quarter total operating revenue, excluding fuel surcharges, increased approximately 18.0% vs. the comparable quarter 2019.

Total freight transactions in the Marketplace for J.B. Hunt 360 increased to US$468.0 million in Q4, 2020 compared to US$289.0 million in the prior year quarter. ICS revenue on the platform increased to US$387.0 million with an approximate 27.0% increase in volume versus the year ago period. JBI and JBT executed approximately US$40.0 million and US$41.0 million, respectively, of their third-party dray and independent contractor costs through the freight platform during the quarter.

Operating income for the current quarter totalled US$207.7 million vs. US$205.1 million Q4, 2019. The benefit from increased revenue was offset with cost increases in rail and other third-party purchase transportation costs, including outsource dray costs; increases in driver wages and recruiting costs; investments in technology spend on new applications and legacy operating systems; higher salary and wage expenses for non-driving personnel; and higher group medical expense.

Intermodal (JBI)

Fourth Quarter 2020 Segment Revenue: US$1.25 billion; down 1.0%
Fourth Quarter 2020 Operating Income: US$110.8 million; down 16.0%

JBI total volumes increased 1.0% over the same period in 2019. Transcontinental loads grew by 1.0% and eastern network loads were flat compared to Q4, 2019. Volumes in the quarter continued to be heavily constrained by rail congestion and service issues stemming from elevated demand levels and labor challenges in rail, truck and customer operations that escalated into the mid-to-late part of December. Segment revenue decreased 1.0%, reflecting the 1.0% increase in volume offset by a 2.0% decrease in revenue per load, which is a result of the combination of freight mix, customer rates, and fuel surcharges. Revenue per load excluding fuel surcharge revenue was up 4.0% year over year.

More:  DSV collaborates to produce 3D printed visors for NHS staff in Wales

Operating income decreased 16.0% from the prior year period. The decline in operating income is primarily attributable to lost productivity and higher costs across rail, truck and customer operations associated with congestion and service disruptions stemming from strong demand, general labour tightness, and other challenges attributable to COVID-19. Specific to JBI, greater utilisation and costs related to third party drayage capacity, higher costs to attract and retain drivers, and increased group medical expense also contributed to the decline. The current period ended with approximately 98,700 units of trailing capacity and approximately 5,660 power units in the dray fleet.

Dedicated Contract Services (DCS)

Fourth Quarter 2020 Segment Revenue: US$568.0 million; up 3.0%
Fourth Quarter 2020 Operating Income: US$77.6 million; up 4.0%

DCS revenue increased 3.0% during the current quarter over the same period 2019. Productivity (revenue per truck per week) increased approximately 1.0% vs. 2019. Productivity excluding fuel surcharge revenue increased approximately 4.0% from a year ago primarily from higher utilisation of assets, contracted indexed-based price escalators, and less equipment idled in the quarter. A net additional 132 revenue producing trucks, 188 net additions sequentially from Q3, 2020, were in the fleet by the end of the quarter. Customer retention rates remain above 98.0%.

Operating income increased 4.0% over the prior year quarter. The benefits from increased productivity of assets, reduced driver turnover and lower travel and entertainment expenses were partially offset by increases in driver wages and recruiting costs partially related to recent customer start-up accounts, higher salary and wages for non-driver personnel, and group medical cost increases.

Integrated Capacity Solutions (ICS)

Fourth Quarter 2020 Segment Revenue: US$587.0 million; up 56.0%
Fourth Quarter 2020 Operating Income: US$5.6 million; compared to US$(11.8) million Operating Loss in Q4, 2019

ICS revenue increased 56.0% in the current quarter vs. Q4, 2019. Revenue growth was driven primarily from a 39.0% increase in revenue per load which was favourably impacted by freight mix changes and higher spot and contractual rates as compared to Q4, 2019. Segment volumes increased 13.0%, with truckload volumes increasing at a rate greater than 20.0% in the quarter vs. the prior year period. Contractual volumes represented approximately 51.0% of the total load volume and 35.0% of the total revenue in the current quarter compared to 66.0% and 54.0%, respectively, in Q4, 2019. Of the total reported ICS revenue, approximately US$387.0 million was executed through the Marketplace for J.B. Hunt 360 compared to US$225.0 million in Q4, 2019.

More:  Diversified business model supports Q2 performance at Mullen Group

Operating income increased to US$5.6 million compared to an operating loss of US$11.8 million in the fourth quarter of 2019. Benefits from increased scale in the Marketplace for J.B Hunt 360 platform, combined with higher gross margins, were partially offset by higher personnel and technology investments as compared to the same period of 2019. Gross profit margins increased to 10.8% in the current period versus 10.6% in the prior year period. ICS carrier base increased 19.0% year over year.

Final Mile Services (FMS)

Fourth Quarter 2020 Segment Revenue: US$213.0 million; up 30.0%
Fourth Quarter 2020 Operating Income: US$5.5 million; up 12.0%

FMS revenue increased 30.0% compared to the same period 2019. Stop count within FMS increased 42.0% during the current quarter vs. a year ago, primarily from the December 2019 acquisition and the addition of multiple customer contracts implemented throughout 2020. Productivity, defined as revenue per stop, decreased approximately 9.0% compared to the prior year period primarily from a shift in the mix of business between asset and asset-light operations.

Operating income increased 12.0% over the prior year quarter driven primarily by increases in revenue, which was partially offset by investments in service quality performance controls across the network, increased insurance and claims costs, higher bad debt expense, and increases in group medical expense.

Truck (JBT)

Fourth Quarter 2020 Segment Revenue: US$140.0 million; up 50.0%
Fourth Quarter 2020 Operating Income: US$8.4 million; up 32.0%

JBT revenue increased 50.0% in the quarter compared to the same period in 2019. Revenue excluding fuel surcharge revenue increased 58.0% as a result of a 23.0% increase in load count and a 28% increase in revenue per load excluding fuel surcharge revenue compared to a year ago. Load count growth was primarily driven from the continued expansion of 360box which leverages the J.B. Hunt 360 platform to access a greater amount of capacity for customers. Revenue per loaded mile excluding fuel surcharge revenue increased approximately 19.0% year over year while comparable contractual customer rates were up approximately 5.0% compared to the same period 2019. At the end of the period, JBT operated 1,769 tractors and 8,567 trailers compared to 1,831 and 6,975 one year ago, respectively.

Operating income increased 32.0% compared to the same quarter 2019. Benefits from increased load counts and revenue per load were partially offset by increases in purchased transportation expense. In addition, higher salary and wage expenses for non-driving personnel and increased investment in technology, related to the expansion of 360box, weighed on operating income performance.


More from: | Category: Logistics Company News