J.B. Hunt Shares Drop Sharply After Missing Profit and Sales Expectations Amid Falling Freight Rates
J.B. Hunt's stock declined significantly following the company's failure to meet profit and revenue projections, driven by a drop in freight pricing.
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Key Insights
- J.B. Hunt fell short of profit and sales targets due to decreasing freight service prices.
- Revenue per load declined in both Intermodal and Truckload business segments.
- Customer inventory reductions have dampened shipping demand, according to the company.
Shares of J.B. Hunt Transport Services (JBHT) plunged more than 8% on Wednesday after the logistics leader reported earnings and revenue figures that missed analyst expectations amid falling freight rates.
For the third quarter of fiscal 2023, J.B. Hunt's net income dropped 30.4% year-over-year to $187.4 million, or $1.80 per share. Total revenue fell 17.6% to $3.16 billion, both figures coming in below market forecasts.
The company revealed that revenue per load decreased by 14% in its Intermodal division and by 22% in its Truckload segment. Additionally, the Integrated Capacity Solutions unit experienced a 38% volume decline, Final Mile Services stops decreased by 20%, and Dedicated Contract Services saw a 1% reduction in average revenue-producing trucks.
Fuel surcharge revenue declined 30% to $472 million, representing 14.9% of total revenue compared to 17.6% the previous year.
J.B. Hunt attributed the disappointing performance to customers reducing inventory levels, which led to lower shipping demand, though this trend began easing in June.
Despite the selloff on Wednesday, J.B. Hunt’s shares remain positive for the year overall.
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