Core Points - J.B. Hunt Transport Services' board has approved a new share repurchase plan worth $1 billion, which will start after the completion of the existing $500 million plan [1] - The existing buyback plan, initiated in July 2022, has seen $228.3 million in shares repurchased in the first half of 2024 [1] - The timing and volume of the new buybacks will be determined by JBHT based on market conditions [2] Dividend Information - J.B. Hunt has increased its quarterly cash dividend by 2%, raising it from 42 cents to 43 cents per share [3] - Dividend-paying stocks like JBHT are considered safer investments, providing a steady income stream and acting as a hedge against economic uncertainty [4] - Other companies in the transportation sector, such as FedEx and Delta Air Lines, have also increased their dividends in 2024, indicating a trend among industry players [5]

Core Viewpoint - J.B. Hunt Transport Services (JBHT) is currently rated as a Zacks Rank 5 (Strong Sell) due to declining earnings estimates following an earnings miss in July [1]. Company Overview - J.B. Hunt Transport Services, Inc. provides logistics solutions and operates through several segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT) [2]. - The JBI segment focuses on intermodal freight operations for rail carriers, while DCS includes private fleet conversion and final-mile delivery services [2]. - ICS offers single-source logistics management for clients outsourcing transportation activities, and FMS provides final-mile delivery services through a nationwide network [2]. - JBT is responsible for full-load, dry-van freight transported via roads and highways [2]. - The company was founded in 1961 and is headquartered in Lowell, AR [2]. Earnings History - J.B. Hunt has experienced seven consecutive misses of the Zacks Consensus Estimate, with the most recent quarter reporting earnings of $1.32 against a consensus of $15.54 [4]. - Consistent earnings misses indicate a lack of effective communication of expectations from management to the market [3]. Earnings Estimates - Recent earnings estimates for JBHT have been revised downward, with the current fiscal year consensus dropping from $6.53 to $5.73 over the last 60 days [5]. - The next year's estimates have also decreased from $8.35 to $7.59 in the same timeframe [5]. - The negative trend in earnings estimates is a significant factor contributing to the stock's Zacks Rank of 5 (Strong Sell) [5]. Market Context - Many stocks within the Zacks universe are experiencing negative earnings estimate revisions, leading to a broader trend of stocks falling to a Zacks Rank 5 (Strong Sell) [6].

Core Viewpoint - J.B. Hunt Transport Services, Inc. is facing significant challenges across its business segments, with second-quarter 2024 revenues falling short of expectations and declining year over year [1]. Financial Performance - The company reported second-quarter 2024 revenues of $2.93 billion, missing the Zacks Consensus Estimate of $3.03 billion and representing a 7% decline from the previous year [1]. - Total operating revenues, excluding fuel surcharge revenue, decreased by 6% year over year, driven by a 5% drop in gross revenue per load in Intermodal and a 25% decline in load volume in Integrated Capacity Solutions, along with 9% declines in Truckload and Dedicated Contract Services [2]. - However, Final Mile Services experienced a 5% revenue growth, primarily due to new contracts, and Integrated Capacity Solutions saw a 5% increase in revenue per load [2]. Cost and Expense Management - Operating expenses decreased by 12.2% year over year in 2023 and fell by 5.8% year over year in the first half of 2024, attributed to lower fuel costs and reduced transportation and labor expenses [8]. Debt and Cash Position - The company's cash and cash equivalents were reported at $53.50 million at the end of Q2 2024, significantly lower than its long-term debt of $1.48 billion, indicating potential liquidity issues [4]. - Net interest expense for the first half of 2024 rose by 21.9% year over year due to higher interest rates and debt issuance costs, despite some offset from increased interest income [3]. Shareholder Actions - J.B. Hunt has been active in rewarding shareholders through dividend payments and share repurchases, purchasing approximately 1,225,000 shares for $203 million in Q2 2024, with $163 million remaining under its share repurchase authorization [7]. Market Performance - The company's shares have declined by 15.5% year to date, contrasting with a 3.3% loss in the broader industry [6]. - J.B. Hunt has a history of disappointing earnings surprises, missing the Zacks Consensus Estimate in each of the last four quarters with an average miss of 12.77% [4].

Revenue Performance - JBI segment revenue decreased 5% to $1.41 billion in Q2 2024, down from $1.49 billion in Q2 2023, with operating income down 31% to $99.2 million[9] - FMS segment revenue increased 5% to $235 million in Q2 2024, up from $224 million in Q2 2023, with operating income rising to $19.8 million from $14.8 million[10] - Total consolidated operating revenues for the first six months of 2024 were $5.87 billion, an 8% decrease from $6.36 billion in the same period of 2023[46] - JBI segment revenue for the first six months of 2024 decreased 7% to $2.80 billion, with operating income down 35% to $201.1 million[47] - DCS segment revenue decreased 3% to $1.71 billion in the first six months of 2024, with operating income down to $190.1 million from $216.2 million[48] - ICS revenue decreased 24% to $555.7 million in the first six months of 2024, resulting in an operating loss of $30.8 million[49] - FMS revenue increased 3% to $465 million in the first six months of 2024, with operating income rising to $34.9 million from $21.4 million[51] - Total operating revenues decreased by 6.5% in Q2 2024 compared to Q2 2023, amounting to $205.7 million[66] - Total operating revenues for the six months ended June 30, 2024, decreased by 7.7% compared to the same period in 2023[74] Operating Expenses - Total operating expenses decreased 5.9% while operating revenues decreased 7.7% in the first six months of 2024 compared to the prior year[54] - Total operating expenses decreased by 4.9% in Q2 2024, with significant reductions in rents and purchased transportation costs by 9.3%[66][67] - General and administrative expenses rose by 21.5% in Q2 2024, primarily due to higher building rental expenses and increased professional services costs[70] Net Earnings and Income - Operating income fell to 7.0% of total revenues in Q2 2024, down from 8.6% in Q2 2023, reflecting a 24.0% decrease[66] - Net earnings decreased by 28.3% in Q2 2024, representing 4.6% of total revenues compared to 6.1% in Q2 2023[66] Cash Flow and Debt - Net cash provided by operating activities totaled $827 million in the first six months of 2024, down from $1.1 billion in the same period of 2023[60] - The company had a cash balance of $53.5 million and an outstanding balance of $287 million on the revolving line of credit as of June 30, 2024[62] - Net interest expense increased 22.0% in 2024 due to higher effective interest rates and an increase in average debt balance[59] - Net interest expense increased by 38.3% in Q2 2024 due to higher effective interest rates and an increased average debt balance[72] Taxation - The effective income tax rate for Q2 2024 was 26.8%, compared to 26.0% in Q2 2023, with an expected annual tax rate between 24.0% and 25.0%[72] Shares Outstanding - The number of shares outstanding as of June 30, 2024, was 101,986,531[77]

Justin Paget/DigitalVision via Getty Images J.B. Hunt is finding itself in a unique position as the macroeconomic data appears relatively mixed. On the one hand, June ISM-PMIs are flashing contractionary territory as business activity, new orders, backlogs, and inventories fall into sharp decline. I believe the silver lining here is that inventories have been drastically drawn down in an attempt to right-size businesses, and that replenishment will inevitably occur. Though this is a more optimistic outlook, ...

Core Insights - J.B. Hunt Transport Services Inc (NASDAQ:JBHT) stock is experiencing a decline of 7.2% to $163.31, breaking a five-day winning streak and remaining down 18.3% year-to-date [1][2] - The company's second-quarter results were disappointing, with profits falling 24% due to industry headwinds, prompting analysts to adjust their price targets [2] - J.P. Morgan Securities raised its price target for JBHT from $184 to $201, while Barclays reduced its target from $170 to $160 [2] Options Activity - There has been significant activity in the options market, with 2,614 calls and 4,079 puts exchanged, which is eight times the average daily options volume [3] - The most popular options contracts are the July 160 and 165 puts [3] - JBHT's stock is considered "oversold," indicated by a 14-day relative strength index (RSI) of 85.9, which may be influencing the negative price movement [3]

Core Insights - J.B. Hunt's quarterly earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and represented a 27% decline year over year [1] - Total operating revenues of $2.93 billion fell short of the Zacks Consensus Estimate of $3.03 billion, marking a 7% year-over-year decrease [12] - The company reported an operating loss of $13.3 million, an increase from the previous quarter's loss of $4.4 million, attributed to decreased gross profit and higher costs [5] Financial Performance - Operating income for the reported quarter decreased 24% year over year to $205.7 million due to lower revenues and increased expenses [2] - Net interest expenses grew 38% year over year, driven by higher effective interest rates and a consolidated debt balance [13] - Cash and cash equivalents at the end of the quarter were $53.50 million, down from $64.18 million in the prior quarter, while long-term debt increased to $1.48 billion from $1.36 billion [27] Segment Performance - The Dedicated Contract Services segment saw revenues decline 4% year over year to $851 million, impacted by a 1% drop in average trucks and a 3% decrease in productivity [4] - The Intermodal division generated revenues of $1.41 billion, down 5% year over year due to a 1% decrease in volume and a 5% decrease in gross revenue per load [14] - Integrated Capacity Solutions revenues decreased 21% year over year to $270 million, with segmental volumes down 25% [16] Market Reaction - Shares of J.B. Hunt declined 2.93% in after-market trading following the disappointing second-quarter results [11] - Year-to-date, J.B. Hunt's shares have decreased by 14.9%, compared to a 3.6% loss in the industry [20] Shareholder Actions - In the second quarter of 2024, J.B. Hunt repurchased approximately 1,225,000 shares for $203 million, with about $163 million remaining under its share repurchase authorization [19]

Financial Data and Key Metrics Changes - Revenue declined 7% year-over-year, operating income decreased 24%, and diluted earnings per share fell by 27% [27][28] - The tax rate for the quarter was slightly elevated at 26.8%, with expectations for the full year tax rate to be in the range of 24% to 25% [28] Business Line Data and Key Metrics Changes - Intermodal and Highway Services businesses experienced lower revenue primarily due to lower rates, with a noted decline in operating income [27] - Dedicated margins were softer, underperforming seasonality, despite selling a few hundred more trucks [9] - Final Mile business showed progress in its profit improvement plan, with stable demand for appliances and exercise equipment but continued softness in furniture demand [38] Market Data and Key Metrics Changes - Intermodal volumes were down 1% year-over-year, with a 7% decline in the east, partially offset by a 4% growth in the Transcon business [42] - The overall brokerage environment remains competitive, with ICS gross revenue declining 21% year-over-year, driven by a 25% decline in volume [48] Company Strategy and Development Direction - The company remains focused on delivering exceptional value through operational excellence, scaling long-term investments in people, technology, and capacity, and driving long-term value for shareholders [17][23] - The management team is committed to maintaining a long-term mindset while managing costs in the near term, with a disciplined approach to capital allocation [25][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions but expressed optimism about the potential for future growth, particularly in the Intermodal and Dedicated segments [24][46] - There is a recognition of the need for pricing improvements to enhance margins, with a focus on volume as a leading indicator [56][65] Other Important Information - The company has received multiple awards for high service levels from customers and continues to invest in safety and technology to enhance operational efficiency [24][39] - The acquisition of Intermodal assets from Walmart earlier this year is expected to increase long-term growth potential [25] Q&A Session Summary Question: Insights on volume pickup in June - Management noted that the volume increase was influenced by various factors, including early shipments for peak season and improved customer business [53] Question: Intermodal margin recovery - Management indicated that pricing improvements are essential for margin recovery, with volume being a leading indicator [61][65] Question: Expectations for revenue per load and margin - Management suggested that the full impact of the bid cycle would be reflected in the third quarter, with no significant step downs anticipated [67] Question: Market dynamics and share loss - Management acknowledged challenges in the market but highlighted strong performance in the Transcon marketplace and ongoing discussions with customers about value propositions [69] Question: Long-term growth outlook - Management emphasized the importance of long-term investments in people, technology, and capacity to prepare for future growth opportunities [71][75]

Core Insights - JB Hunt reported $2.93 billion in revenue for Q2 2024, a year-over-year decline of 6.5% and EPS of $1.32 compared to $1.81 a year ago [1] Revenue Performance - Intermodal revenue was $1.41 billion, matching the average estimate, but reflecting a year-over-year decline of 5.5% [3] - Revenue from Integrated Capacity Solutions was $270.38 million, below the average estimate of $301.96 million, representing a year-over-year decline of 21.3% [3] - Truckload revenue was $168.10 million, below the average estimate of $176.29 million, showing a year-over-year decline of 12.4% [3] - Dedicated revenue was $851.01 million, below the average estimate of $895.33 million, with a year-over-year decline of 4.1% [3] - Final Mile Services revenue was $235.29 million, slightly below the average estimate but showing a year-over-year increase of 5.1% [3] - Fuel surcharge revenues were $383.66 million, below the average estimate of $405.22 million, reflecting a year-over-year decline of 9.7% [3] - Operating revenues, excluding fuel surcharge revenues, were $2.55 billion, below the average estimate of $2.63 billion, representing a year-over-year decline of 6% [3] Earnings Performance - The reported revenue was a surprise of -3.53% compared to the Zacks Consensus Estimate of $3.04 billion, and the EPS surprise was -12.58% against the consensus estimate of $1.51 [4] Stock Performance - JB Hunt shares returned +7.4% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [5] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [5]

Company Performance - JB Hunt reported quarterly earnings of $1.32 per share, missing the Zacks Consensus Estimate of $1.51 per share, and down from $1.81 per share a year ago [8] - The company posted revenues of $2.93 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 3.53%, and down from $3.13 billion year-over-year [2] - JB Hunt has not surpassed consensus EPS estimates over the last four quarters [9] Stock Performance - JB Hunt shares have declined approximately 15.1% since the beginning of the year, contrasting with the S&P 500's gain of 18.1% [3] - The current consensus EPS estimate for the upcoming quarter is $1.73 on revenues of $3.19 billion, and for the current fiscal year, it is $6.43 on revenues of $12.54 billion [5] Industry Outlook - The Transportation - Truck industry, to which JB Hunt belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, indicating a challenging environment [13] - The estimate revisions trend for JB Hunt is unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [12]