Q1 2025 Results J.B. Hunt Transport Services, Inc. Truckload (JBT) Disclosure This presentation and discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "estimates," or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activit ...

Financial Data and Key Metrics Changes - For Q1 2025, consolidated GAAP revenue declined by 1%, operating income decreased by 8%, and diluted EPS decreased by 4% compared to the prior year quarter, primarily due to lower yields and inflationary cost pressures [15][16][20] - The company has reduced people costs by over $200 million over the past two years through headcount attrition and performance management, although some savings were offset by merit increases and higher benefit costs [16][17] Business Line Data and Key Metrics Changes - Intermodal volumes reached record levels in Q1 2025, with an 8% year-over-year increase, and strong performance in the Eastern network, which grew by 13% [13][45] - The Dedicated Contract Services segment continues to have industry-leading margins, with a focus on maintaining balance in the network to drive the best utilization of trailing assets [31][39] - The Final Mile segment experienced muted demand for big and bulky products, although fulfillment network demand was positive due to off-price retail trends [30] Market Data and Key Metrics Changes - Overall customer demand trended in line with normal seasonality, despite weather events impacting operations in January and February [22] - The truckload market has loosened as the quarter progressed, indicating that truckload capacity continues to exceed demand [23] Company Strategy and Development Direction - The company remains focused on operational excellence, providing valuable services to customers, and scaling strategic investments [10][12] - Management is exploring various options to aggressively eliminate costs while remaining agile to adapt to changing market dynamics [10][11] Management's Comments on Operating Environment and Future Outlook - The management team expressed confidence in the company's positioning for future growth despite a challenging freight environment, emphasizing the importance of service levels and safety culture [12][13] - The company is committed to repairing margins and improving financial performance, with a focus on cost discipline and productivity improvements [9][19] Other Important Information - The company issued $750 million of new senior notes to extend the term on some maturing debt and expects net capital expenditures to fall between $500 million to $700 million for 2025 [20] - During Q1, the company repurchased $234 million of stock, with $650 million remaining under current authorization [21] Q&A Session Summary Question: Can you provide insights on intermodal bid season and rate increases? - Management indicated mild satisfaction with bid season success, achieving some rate increases while also losing some business due to disciplined pricing [56][57] Question: How do you view the impact of tariffs on the market? - Management acknowledged potential impacts of tariffs on supply and demand but noted the difficulty in predicting magnitude and timing [25][86] Question: What is the outlook for intermodal pricing and profitability? - Management stated that while they are working to repair margins, the competitive environment and network inefficiencies continue to pose challenges [135][136] Question: How is the company managing its capacity in light of current market conditions? - Management emphasized that reducing capacity is not the strategy; instead, they are looking for ways to utilize excess equipment effectively [116][119] Question: What are the expectations for intermodal revenue per carload in the second half of the year? - Management noted that while there is a consensus for a 2% gain, the ongoing negotiations and market conditions could lead to different outcomes [148][150]

Core Insights - JB Hunt reported $2.92 billion in revenue for Q1 2025, a year-over-year decline of 0.8%, with EPS of $1.17 compared to $1.22 a year ago, indicating a slight decrease in profitability [1] - The revenue exceeded the Zacks Consensus Estimate by 0.10%, while the EPS surprised by 1.74% over the consensus estimate of $1.15 [1] Revenue Performance - Dedicated revenue was $822.29 million, down 4.4% year-over-year, compared to the average estimate of $856.59 million [4] - Integrated Capacity Solutions revenue was $268.04 million, a 6% decline year-over-year, against an estimate of $283.57 million [4] - Intermodal revenue increased by 5.3% year-over-year to $1.47 billion, surpassing the average estimate of $1.42 billion [4] - Truckload revenue was $166.63 million, down 6.6% year-over-year, compared to the average estimate of $173.99 million [4] - Final Mile Services revenue decreased by 12.5% year-over-year to $200.70 million, below the estimate of $223.06 million [4] - Fuel surcharge revenues were $361.66 million, down 7.6% year-over-year, slightly above the estimate of $359.16 million [4] Key Metrics - Average trucks in Dedicated segment were 12,624, slightly below the estimate of 12,736 [4] - Revenue per load in Integrated Capacity Solutions was $1,946, exceeding the estimate of $1,890.89 [4] - Revenue per load in Intermodal was $2,816, slightly above the estimate of $2,802.74 [4] - Trailing equipment in Intermodal was 124,971, exceeding the estimate of 123,062 [4] - Operating revenues, excluding fuel surcharge revenues, were $2.56 billion, a 0.3% increase year-over-year, but below the estimate of $2.58 billion [4] - Intersegment eliminations were -$5.53 million, worse than the estimate of -$4.63 million, representing a 30.2% increase year-over-year [4] Stock Performance - JB Hunt shares returned -7.8% over the past month, underperforming the Zacks S&P 500 composite's -3.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Group 1: Earnings Performance - JB Hunt reported quarterly earnings of $1.17 per share, exceeding the Zacks Consensus Estimate of $1.15 per share, but down from $1.22 per share a year ago, representing an earnings surprise of 1.74% [1] - The company posted revenues of $2.92 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.10%, but down from $2.94 billion year-over-year [2] - Over the last four quarters, JB Hunt has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - JB Hunt shares have declined approximately 19.2% since the beginning of the year, compared to a decline of 8.1% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.45 on revenues of $3.01 billion, and for the current fiscal year, it is $6.16 on revenues of $12.44 billion [7] - The estimate revisions trend for JB Hunt is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Transportation - Truck industry, to which JB Hunt belongs, is currently in the bottom 4% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact JB Hunt's stock performance [5]

J.B. Hunt Transport Services (JBHT) Q1 2025 Earnings Call April 15, 2025 05:00 PM ET Company Participants Brad Delco - Senior Vice President of FinanceShelley Simpson - President & CEOJohn Kuhlow - EVP & CFOSpencer Frazier - Executive Vice President of Sales & MarketingNick Hobbs - Chief Operating Officer & President - Highway, Final Mile Services and EVPBrad Hicks - President - Dedicated Contract Services® & EVPDarren Field - Executive VP & President of IntermodalDaniel Imbro - Managing DirectorJonathan Ch ...

Financial Performance - First quarter 2025 net earnings were $117.7 million, or diluted earnings per share of $1.17, down 4% from $127.5 million, or $1.22 per diluted share in Q1 2024[2][6]. - Total operating revenue for Q1 2025 was $2.92 billion, a decrease of 1% from $2.94 billion in Q1 2024, primarily due to a 5% decrease in average truck count in Dedicated Contract Services (DCS) and a 15% decline in Final Mile Services[3][6]. - Operating income decreased 8% to $178.7 million in Q1 2025 compared to $194.4 million in Q1 2024, attributed to lower DCS revenue and increased expenses[4][6]. Revenue Breakdown - Intermodal (JBI) revenue grew by 5% in Q1 2025, driven by an 8% increase in load volume, marking the highest first quarter volume in the company's history[7]. - DCS revenue decreased 4% in Q1 2025, with a 5% decline in average trucks, but productivity increased by 2%[9][13]. - Integrated Capacity Solutions (ICS) reported a revenue decline of 6% in Q1 2025, with an operating loss of $(2.7) million, an improvement from $(17.5) million in Q1 2024[11][15]. - Final Mile Services (FMS) revenue decreased 12% in Q1 2025, primarily due to weak demand across end markets[16][22]. - Truckload (JBT) revenue decreased 7% in Q1 2025, with a 6% decline in revenue per load, although load volume increased by 2%[18][23]. Debt and Share Repurchase - As of March 31, 2025, total outstanding debt was $1.58 billion, up from $1.48 billion at the end of 2024, with net capital expenditures of approximately $225 million in Q1 2025[20][21]. - The company repurchased approximately 1.4 million shares for about $234 million in Q1 2025, with $650 million remaining under its share repurchase authorization[21]. Load and Marketplace Performance - For the three months ended March 31, 2025, J.B. Hunt reported 521,821 intermodal loads, an increase from 485,166 in the same period of 2024, representing a growth of 7.5%[34]. - Revenue per load in the intermodal segment decreased to $2,816 from $2,876, reflecting a decline of 2.1% year-over-year[34]. - The dedicated segment saw a total of 942,894 loads, down from 1,004,337, indicating a decrease of 6.1%[34]. - Integrated Capacity Solutions reported 137,744 loads, a decrease of 13% from 158,247 in the previous year, while revenue per load increased to $1,946 from $1,803, a growth of 7.9%[34]. - The gross profit margin for Integrated Capacity Solutions improved to 15.3%, up from 14.3% year-over-year[34]. - The marketplace for J.B. Hunt 360 generated $91.9 million in revenue, down from $105.5 million, a decline of 13%[34]. Cash Flow and Assets - Net cash provided by operating activities for the three months ended March 31, 2025, was $404.2 million, compared to $466.5 million in 2024, a decrease of 13.3%[38]. - Current assets totaled $1.67 billion as of March 31, 2025, down from $1.77 billion at the end of 2024, a decline of 6.1%[36]. - Total current liabilities increased to $1.87 billion from $1.68 billion, reflecting an increase of 11.2%[36]. - The book value per share decreased to $38.98 from $39.92, a decline of 2.4% year-over-year[38].

Core Viewpoint - Analysts forecast JB Hunt (JBHT) will report quarterly earnings of $1.16 per share, reflecting a year-over-year decline of 4.9%, with anticipated revenues of $2.94 billion, a decrease of 0.2% compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised 3.2% lower over the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts predict 'Revenue- Truckload' will reach $173.99 million, down 2.4% from the year-ago quarter [5]. - The estimated 'Revenue- Dedicated' is $856.59 million, indicating a decline of 0.4% from the prior-year quarter [5]. - The consensus for 'Revenue- Final Mile Services' stands at $223.06 million, reflecting a decrease of 2.7% from the previous year [5]. - 'Revenue- Integrated Capacity Solutions' is expected to reach $283.57 million, down 0.6% from the prior-year quarter [6]. Load and Revenue per Load Estimates - Analysts estimate 'Intermodal - Loads' will reach 505,145, compared to 485,166 in the same quarter last year [6]. - 'Integrated Capacity Solutions - Revenue per load' is projected at $1,890.89, up from $1,803 in the same quarter last year [7]. - 'Intermodal - Revenue per load' is forecasted to be $2,802.74, down from $2,876 in the same quarter last year [7]. Truck and Equipment Estimates - 'Dedicated - Average trucks during the period' is expected to be 12,736, down from 13,298 in the same quarter last year [8]. - 'Intermodal - Trailing equipment (end of period)' is projected to reach 123,062, compared to 119,307 in the same quarter last year [8]. - 'Final Mile Services - Average trucks during the period' is expected to be 1,372, down from 1,408 in the same quarter last year [9]. - 'Integrated Capacity Solutions - Loads' is projected at 147,483, down from 158,247 in the same quarter last year [9]. - 'Truckload - Loads' is expected to be 96,381, compared to 93,685 in the same quarter last year [10]. Stock Performance - JB Hunt shares have experienced a decline of 8.3% in the past month, contrasting with a 5.3% move in the Zacks S&P 500 composite [10].

Core Viewpoint - J.B. Hunt Transport Services, Inc. (JBHT) is currently facing multiple challenges that make it an unattractive investment option [1] Financial Performance - J.B. Hunt's fourth-quarter 2024 operating revenues were $3.15 billion, exceeding the Zacks Consensus Estimate of $3.13 billion but reflecting a 4.8% year-over-year decline [2] - Total operating revenues, excluding fuel surcharge revenue, decreased by 2% year-over-year, driven by a 3% decline in intermodal revenue per load and a 2% decline in Truckload revenue per load [2] - The average trucks in Dedicated Contract Services saw a 4% decline, while load volume in Integrated Capacity Solutions dropped by 22% [2] Cost and Debt Issues - J.B. Hunt's net interest expense for 2024 increased by 23.9% year-over-year due to higher effective interest rates and a consolidated debt balance, despite some offset from higher interest income [3] - The company's cash and cash equivalents were reported at $46.98 million at the end of Q4 2024, significantly lower than its short-term debt of $500 million, indicating insufficient cash to meet debt obligations [4] Market Performance - J.B. Hunt's shares have decreased by 22% over the past year, while the transportation-truck industry has seen a decline of 35.7% [5] - The Zacks Consensus Estimate for current-quarter earnings has been revised downward by 23.1% in the past 60 days, with a 14.5% downward revision for the current year [8] Earnings and Ranking - J.B. Hunt currently holds a Zacks Rank of 4 (Sell) and has a Value Score of C, indicating its unattractiveness [9] - The company has a poor earnings surprise history, missing the Zacks Consensus Estimate in three of the last four quarters, with an average miss of 8.37% [9]

Revenue Performance - Total consolidated operating revenues decreased 5.8% to $12.09 billion in 2024, down from $12.83 billion in 2023[127] - Total segment revenues decreased to $12.105 billion in 2024 from $12.848 billion in 2023[135] - JBI segment revenue decreased 4% to $5.96 billion in 2024, down from $6.21 billion in 2023, primarily due to a 6% decrease in revenue per load[137] - DCS segment revenue decreased 4% to $3.40 billion in 2024, compared to $3.54 billion in 2023, with productivity defined as revenue per truck per week decreasing by 2%[139] - ICS segment revenue decreased 18% to $1.14 billion in 2024, with overall volumes down 20% and revenue per load increasing by 3%[141] - FMS segment revenue decreased 1% to $910 million in 2024 from $918 million in 2023, attributed to general weakness in customer demand[143] - JBT segment revenue decreased 11% to $702 million in 2024, with a 5% decrease in revenue per load and load volume[145] Operating Expenses and Income - Operating expenses decreased 4.9% in 2024, resulting in an operating ratio of 93.1% compared to 92.3% in 2023[128] - Rents and purchased transportation costs decreased 8.4% in 2024, primarily due to lower rates and decreased load volume[129] - Operating income for the JBI segment decreased to $430 million in 2024 from $569 million in 2023, impacted by increased maintenance and equipment-related costs[138] - Operating income for the DCS segment decreased to $376 million in 2024 from $405 million in 2023, primarily due to higher insurance premiums and new account start-up costs[140] Cash Flow - Net cash provided by operating activities totaled $1.48 billion in 2024, down from $1.74 billion in 2023, primarily due to decreased earnings of approximately $157 million[149] - Net cash used in investing activities totaled $664 million in 2024, a significant decrease from $1.69 billion in 2023, mainly due to reduced equipment purchases[149] Tax and Interest - Net interest expense increased by 23.0% in 2024, attributed to higher effective interest rates and increased average debt balance[133] - Effective income tax rate increased to 24.8% in 2024 from 22.1% in 2023, primarily due to discrete tax items recorded in 2023[133] Fuel Price Impact - Diesel fuel prices are subject to fluctuations due to global oil production, seasonality, weather, and other market factors[161] - Historically, the company has been able to recover a majority of fuel-price increases through fuel surcharges[161] - The company cannot predict the extent of future fuel price fluctuations or the effectiveness of fuel surcharges in offsetting these increases[161] - As of December 31, 2024, the company had no derivative financial instruments to mitigate fuel-price fluctuations[161] General and Administrative Expenses - General and administrative expenses increased 11.6% in 2024, driven by higher building rental and technology costs[132] Asset Disposal - Net loss from sale or disposal of assets was $14.6 million in 2024, compared to a loss of $27.8 million in 2023[132] Segment Performance - The gross profit margin for the ICS segment increased to 16.1% in 2024 from 13.4% in 2023, despite an operating loss of $56 million[142]

Company Overview - J.B. Hunt Transport Services, Inc. (JBHT) is currently facing multiple headwinds, making it an unimpressive investment option [1] Earnings Estimates - The Zacks Consensus Estimate for current-quarter earnings has decreased by 23.1% over the past 60 days, while the estimate for the current year has been revised downward by 14.5% in the same timeframe, indicating a lack of confidence from brokers [2] - JBHT has a discouraging earnings surprise history, missing the Zacks Consensus Estimate in three of the last four quarters, with an average miss of 8.37% [4] Stock Performance - JBHT's shares have declined by 16.3% over the past year, compared to a 25.6% loss in the industry [3] Industry Ranking - The trucking industry, which includes JBHT, has a Zacks Industry Rank of 200 out of 250, placing it in the bottom 19% of Zacks industries [5] Financial Health - JBHT's cash and cash equivalents stood at $46.98 million at the end of Q4 2024, significantly lower than its short-term debt of $500 million, indicating insufficient cash to meet debt obligations [6] Operational Challenges - The trucking industry is facing a persistent driver shortage, complicating recruitment as older drivers retire and younger generations show less interest in the profession [7][9]