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J.B. Hunt Transport Services, Inc. Reports U.S. GAAP Revenues, Net Earnings and Earnings Per Share for the Second Quarter 2023

  • Second Quarter 2023 Revenue: $3.13 billion; down 18%
  • Second Quarter 2023 Operating Income: $270.7 million; down 23%
  • Second Quarter 2023 EPS: $1.81 vs. $2.42; down 25%

J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced second quarter 2023 U.S. GAAP (United States Generally Accepted Accounting Principles) net earnings of $189.6 million, or diluted earnings per share of $1.81 versus second quarter 2022 net earnings of $255.3 million, or $2.42 per diluted share.

Total operating revenue for the current quarter was $3.13 billion, compared with $3.84 billion for the second quarter 2022, a decrease of 18%. The decline in revenue was primarily driven by a decrease in revenue per load of 24% in Integrated Capacity Solutions (ICS), 13% in Intermodal (JBI), and 21% in Truckload (JBT), and a 4% decline in productivity in Dedicated Capacity Solutions®(DCS®), as a result of changes in customer rate, freight mix and lower fuel surcharge revenue. Volume declines of 7% in JBI, 26% in ICS, 4% in DCS, and stop count decline of 24% in Final Mile Services® (FMS) also contributed to the year-over­year decline in revenue, partially offset by a 6% increase in JBT volume. Current quarter total operating revenue, excluding fuel surcharge revenue, decreased 14% versus the comparable quarter 2022.

Total freight transactions in the Marketplace for J.B. Hunt 360°® decreased 40% to $336 million in the second quarter 2023 compared to $556 million in the prior year quarter. ICS revenue on the platform decreased 43% to $225 million versus a year ago. JBT and JBI executed $78 million and $33 million, a decrease of 31% and 36%, respectively, of their independent contractor and their third-party dray and power-only capacity through the platform during the quarter.

Operating income for the current quarter decreased 23% to $270.7 million versus $353.1 million for the second quarter 2022. Operating income decreased primarily due to lower revenue across all of our business segments, largely driven by a combination of lower volume and customer rates. In addition, second quarter 2023 included a $4 million net loss from the sale of equipment compared to a $3 million net gain in the prior year quarter. On a consolidated basis, operating margin decreased year-over-year as a result of higher professional driver and non-driver wages and benefits and equipment-related and maintenance expenses as a percentage of gross revenue. These items were partially offset by lower rail and truck purchased transportation costs and insurance and claims cost as a percentage of gross revenue. In addition, the prior year quarter included a net $18.4 million pre-tax expense consisting of an increase in casualty claim expenses, offset by a workers' compensation insurance benefit.

Net interest expense for the current quarter increased approximately 14% from the second quarter 2022 due to higher effective interest rates as average debt balances were similar for both periods.

The effective income tax rate was 26.0% in the current quarter compared to 25.0% in the second quarter 2022. We continue to expect our 2023 annual tax rate to be between 24.0% and 25.0%.

Segment Recast:

On January 1, 2023, the Company transferred the majority of JBT's company owned trucking operations to DCS and transferred its less-than-truckload brokerage operations from ICS to FMS. The segment information discussed below adjusts the prior year periods for these operational transfers between segments.

Segment Information:

Intermodal (JBI)

  • Second Quarter 2023 Segment Revenue: $1.49 billion; down 19%
  • Second Quarter 2023 Operating Income: $142.9 million; down 29%

Intermodal volume decreased 7% over the same period in 2022. Eastern network loads decreased 6%, while transcontinental loads decreased 8%. Demand for intermodal capacity continued to be impacted by weaker overall freight activity, particularly import-related freight. Segment gross revenue decreased 19% from the prior-year period, reflecting the 7% decrease in volume and a 13% decrease in gross revenue per load, resulting from changes in the mix of freight, customer rates, and fuel surcharge revenues. Revenue per load excluding fuel surcharge revenue decreased 7% year-over-year.

Operating income decreased 29% in the second quarter primarily from lower customer rate and volume, and the resulting impact on absorbing network and equipment costs. JBl's operating margin declined year-over­year as a result of increases in professional driver and non-driver wages and benefits and higher equipment­related and maintenance expenses as a percentage of gross revenue. The prior year quarter included $7.7 million of the net pre-tax insurance-related expense in the quarter. During the period, we successfully onboarded 326 new pieces of trailing equipment. We ended the quarter with approximately 116,500 containers and 6,500 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Second Quarter 2023 Segment Revenue: $888 million; down 2%
  • Second Quarter 2023 Operating Income: $113.6 million; up 21%

DCS revenue decreased 2% during the current quarter over the same period 2022. Productivity (revenue per truck per week) decreased approximately 4% versus the prior period. Productivity excluding fuel surcharge revenue increased 3% from a year ago driven primarily by increases in contracted indexed­based price escalators. On a net basis, there were 8 fewer revenue producing trucks in the fleet by the end of the quarter compared to the prior-year period, and 97 fewer versus the end of the first quarter 2023. Customer retention rates remain above 98%.

Operating income increased 21% from the prior-year quarter primarily from the maturing of new business onboarded over the trailing twelve months. This benefit was partially offset by higher professional driver and non-driver wages and benefits, and equipment-related and maintenance expenses. The prior year quarter included $1.6 million of the net pre-tax insurance-related expense in the quarter.

Integrated Capacity Solutions (ICS)

  • Second Quarter 2023 Segment Revenue: $344 million; down 43%
  • Second Quarter 2023 Operating (Loss)/Income: $(4.4) million; vs. $23.2 million in Q2'22

ICS revenue declined 43% during the current quarter versus the second quarter 2022. Overall segment volume decreased 26% versus the prior year period. Revenue per load decreased 24% compared to the second quarter 2022 due to lower contractual and transactional rates and changes in customer freight mix. Contractual volume represented approximately 66% of the total load volume and 64% of the total revenue in the current quarter compared to 44% and 47%, respectively, in second quarter 2022. Of the total reported ICS revenue, approximately $225 million was executed through the Marketplace for J.B. Hunt 360 compared to $392 million in second quarter 2022.

Operating loss was $4.4 million compared to operating income of $23.2 million in the second quarter 2022. This change was due largely to lower gross profit, partially offset by lower personnel and insurance-related expenses, and reduced technology costs. Gross profit declined 54% as a result of lower volume, revenue and gross profit margins compared to the prior year period. Gross profit margins decreased to 13.0% in the current period versus 16.1% in the prior period. ICS carrier base decreased 7% year-over-year, largely driven by changes to carrier requirements. The prior year quarter included $6.7 million of the net pre-tax insurance-related expense in the quarter.

Final Mile Services (FMS)

  • Second Quarter 2023 Segment Revenue: $224 million; down 19%
  • Second Quarter 2023 Operating Income: $14.8 million; up 12%

FMS revenue decreased 19% compared to the same period 2022 primarily driven by efforts to improve revenue quality by putting business at risk on contract renewals, and general weakness in demand across many of the industry verticals served. The decline in revenue was partially offset by multiple new customer contracts implemented over the trailing twelve months, as well as improved revenue quality at underperforming accounts.

Operating income increased 12% compared to the prior year period primarily from internal efforts to improve revenue quality and managing costs. Higher revenue quality was partially offset by higher equipment-related expenses, technology investments, and inflationary increases in facility rental expenses. The prior year quarter included $0.4 million of the net pre-tax insurance-related expense in the quarter.

Truckload (JBT)

  • Second Quarter 2023 Segment Revenue: $192 million; down 16%
  • Second Quarter 2023 Operating Income: $3.8 million; down 81%

JBT revenue decreased 16% compared to the same period in the previous year. Revenue excluding fuel surcharge revenue decreased 15% primarily due to a 20% decline in revenue per load excluding fuel surcharge revenue partially offset by a 6% increase in load volume. Total average effective trailer count increased by approximately 3,200 units, or 32%, resulting in strong double-digit growth in volume performance in J.B. Hunt 360box®versus the prior year period. Trailer turns in the quarter were down 20% from the prior period primarily due to freight mix and weaker overall freight demand as compared to the second quarter 2022.

JBT operating income decreased 81% to $3.8 million versus the second quarter 2022. The decrease in operating income was primarily driven by the decline in revenue. JBT's operating margin declined year­over-year as a result of maintaining levels of investment to build out the network and expand the technology capabilities of 360box, in addition to higher equipment-related and maintenance expenses as a percentage of gross revenue. JBT continues to leverage the J.B. Hunt 360 platform to grow third-party power capacity and capability for the 360box service offering. The prior year quarter included $2.0 million of the net pre-tax insurance-related expense in the quarter.

Cash Flow and Capitalization:

At June 30, 2023, we had approximately $1.4 billion outstanding on various debt instruments compared to $1.3 billion at June 30, 2022 and at December 31, 2022.

Our net capital expenditures for the six months ended June 30, 2023 approximated $854 million compared to $598 million for the same period 2022. At June 30, 2023, we had cash and cash equivalents of approximately $296 million. Prior to the end of the quarter, we elected to draw funds available to us under our credit facility, before the term portion of the commitments expired to maintain flexibility and maximize our liquidity.

In the second quarter 2023, we purchased approximately 315,000 shares of common stock for approximately $53 million. At June 30, 2023, we had approximately $467 million remaining under our share repurchase authorization. Actual shares outstanding at June 30, 2023 approximated 103.3 million.

Conference Call Information:

The company will hold a conference call today from 4:00-5:00 p.m. CDT to discuss the quarterly earnings. Investors will have the opportunity to listen to the conference call live over the internet by going to investor.jbhunt.com. Please log on 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an online replay of the earnings call webcast will be available a few hours after the completion of the call.

Forward-Looking Statements:

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2022. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available to interested parties on our website, www.jbhunt.com.

About J.B. Hunt

J.B. Hunt Transport Services Inc. is on a mission to create the most efficient transportation network in North America. The company's industry-leading solutions and mode-neutral approach generate value for customers by eliminating waste, reducing costs and enhancing supply chain visibility. Powered by one of the largest company-owned fleets in the country with more than 162,000 pieces of trailing equipment and nearly one million accessible trucks through its J.B. Hunt 360°® digital freight marketplace, J.B. Hunt can meet the unique shipping needs of any business, from first mile to final delivery, and every shipment in­between. Through disciplined investments in its people, technology and capacity, J.B. Hunt is delivering exceptional value and service that enable long-term growth for the company and its stakeholders.

J.B. Hunt Transport Services Inc. is a Fortune 500 company, an S&P 500 company and a component of the Dow Jones Transportation Average. Its stock trades on NASDAQ under the ticker symbol JBHT. J.B. Hunt Transport Inc. is a wholly owned subsidiary of JBHT. The company's services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, last mile, transload and more. For more information, visit www.jbhunt.com.

 J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Three Months Ended June 30

2023

2022

% Of % Of
Amount Revenue Amount Revenue
 
Operating revenues, excluding fuel surcharge revenues $

2,707,560

 

$

3,159,759

 

Fuel surcharge revenues

425,063

 

677,773

 

Total operating revenues

3,132,623

 

100.0

%

3,837,532

 

100.0

%

 
Operating expenses
Rents and purchased transportation

1,404,586

 

44.8

%

1,920,823

 

50.1

%

Salaries, wages and employee benefits

821,876

 

26.2

%

841,825

 

21.9

%

Fuel and fuel taxes

171,846

 

5.5

%

265,636

 

6.9

%

Depreciation and amortization

179,972

 

5.7

%

157,571

 

4.1

%

Operating supplies and expenses

128,949

 

4.1

%

126,383

 

3.3

%

Insurance and claims

63,893

 

2.1

%

87,258

 

2.3

%

General and administrative expenses, net of asset dispositions

61,472

 

2.1

%

59,764

 

1.6

%

Operating taxes and licenses

18,951

 

0.6

%

16,323

 

0.4

%

Communication and utilities

10,366

 

0.3

%

8,866

 

0.2

%

Total operating expenses

2,861,911

 

91.4

%

3,484,449

 

90.8

%

Operating income

270,712

 

8.6

%

353,083

 

9.2

%

Net interest expense

14,604

 

0.4

%

12,842

 

0.3

%

Earnings before income taxes

256,108

 

8.2

%

340,241

 

8.9

%

Income taxes

66,556

 

2.1

%

84,899

 

2.2

%

Net earnings $

189,552

 

6.1

%

$

255,342

 

6.7

%

Average diluted shares outstanding

104,566

 

105,387

 

Diluted earnings per share $

1.81

 

$

2.42

 

 
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Six Months Ended June 30

2023

2022

% Of % Of
Amount Revenue Amount Revenue
 
Operating revenues, excluding fuel surcharge revenues $

5,450,070

 

$

6,201,976

 

Fuel surcharge revenues

912,142

 

1,124,144

 

Total operating revenues

6,362,212

 

100.0

%

7,326,120

 

100.0

%

 
Operating expenses
Rents and purchased transportation

2,872,384

 

45.1

%

3,758,163

 

51.3

%

Salaries, wages and employee benefits

1,646,875

 

25.9

%

1,605,416

 

21.9

%

Fuel and fuel taxes

367,680

 

5.8

%

455,102

 

6.2

%

Depreciation and amortization

355,784

 

5.6

%

306,334

 

4.2

%

Operating supplies and expenses

257,308

 

4.0

%

233,322

 

3.2

%

Insurance and claims

134,221

 

2.1

%

133,389

 

1.8

%

General and administrative expenses, net of asset dispositions

121,879

 

2.0

%

97,209

 

1.4

%

Operating taxes and licenses

37,058

 

0.6

%

32,073

 

0.4

%

Communication and utilities

20,822

 

0.3

%

17,735

 

0.2

%

Total operating expenses

5,814,011

 

91.4

%

6,638,743

 

90.6

%

Operating income

548,201

 

8.6

%

687,377

 

9.4

%

Net interest expense

29,393

 

0.4

%

25,429

 

0.4

%

Earnings before income taxes

518,808

 

8.2

%

661,948

 

9.0

%

Income taxes

131,488

 

2.1

%

163,282

 

2.2

%

Net earnings $

387,320

 

6.1

%

$

498,666

 

6.8

%

Average diluted shares outstanding

104,647

 

105,729

 

Diluted earnings per share $

3.70

 

$

4.72

 

 
 
Financial Information By Segment
(in thousands)
(unaudited)
 
 
Three Months Ended June 30

2023

2022

% Of % Of
Amount Total Amount Total
 
Revenue
 
Intermodal $

1,489,148

 

48

%

$

1,832,778

 

48

%

Dedicated

887,593

 

28

%

903,925

 

24

%

Integrated Capacity Solutions

343,691

 

11

%

605,606

 

16

%

Final Mile Services

223,939

 

7

%

274,991

 

7

%

Truckload

191,803

 

6

%

227,909

 

5

%

Subtotal

3,136,174

 

100

%

3,845,209

 

100

%

Intersegment eliminations

(3,551

)

(0

%)

(7,677

)

(0

%)

Consolidated revenue $

3,132,623

 

100

%

$

3,837,532

 

100

%

 
 
Operating income
 
Intermodal $

142,860

 

53

%

$

202,529

 

57

%

Dedicated

113,615

 

42

%

94,141

 

27

%

Integrated Capacity Solutions

(4,419

)

(2

%)

23,222

 

7

%

Final Mile Services

14,824

 

5

%

13,249

 

4

%

Truckload

3,798

 

2

%

20,024

 

5

%

Other (1)

34

 

0

%

(82

)

(0

%)

Operating income $

270,712

 

100

%

$

353,083

 

100

%

 
 
Six Months Ended June 30

2023

2022

% Of % Of
Amount Total Amount Total
Revenue
 
Intermodal $

3,028,707

 

48

%

$

3,436,164

 

47

%

Dedicated

1,766,735

 

28

%

1,680,046

 

23

%

Integrated Capacity Solutions

728,465

 

11

%

1,264,478

 

17

%

Final Mile Services

449,016

 

7

%

509,963

 

7

%

Truckload

397,665

 

6

%

457,438

 

6

%

Subtotal

6,370,588

 

100

%

7,348,089

 

100

%

Intersegment eliminations

(8,376

)

(0

%)

(21,969

)

(0

%)

Consolidated revenue $

6,362,212

 

100

%

$

7,326,120

 

100

%

 
 
Operating income
 
Intermodal $

311,518

 

57

%

$

403,500

 

59

%

Dedicated

216,175

 

39

%

173,832

 

25

%

Integrated Capacity Solutions

(9,791

)

(2

%)

47,415

 

7

%

Final Mile Services

21,444

 

4

%

13,839

 

2

%

Truckload

8,788

 

2

%

48,928

 

7

%

Other (1)

67

 

0

%

(137

)

(0

%)

Operating income $

548,201

 

100

%

$

687,377

 

100

%

 
(1) Includes corporate support activity
 
 
Operating Statistics by Segment
(unaudited)
 
Three Months Ended June 30

2023

2022

 
Intermodal
 
Loads

501,681

539,024

Average length of haul

1,655

1,658

Revenue per load $

2,968

$

3,400

Average tractors during the period *

6,517

6,562

Tractors (end of period) *

6,491

6,620

Trailing equipment (end of period)

116,481

110,654

Average effective trailing equipment usage

95,815

108,860

 
 
Dedicated
 
Loads

1,104,896

1,149,401

Average length of haul

172

167

Revenue per truck per week** $

5,182

$

5,380

Average trucks during the period***

13,236

13,001

Trucks (end of period) ***

13,228

13,236

Trailing equipment (end of period)

29,773

27,108

Average effective trailing equipment usage

31,979

32,099

 
 
Integrated Capacity Solutions
 
Loads

194,635

262,213

Revenue per load $

1,766

$

2,310

Gross profit margin

13.0%

16.1%

Employee count (end of period)

769

1,022

Approximate number of third-party carriers (end of period)

144,600

154,800

Marketplace for J.B. Hunt 360 revenue (millions) $

225.0

$

392.1

 
 
Final Mile Services
 
Stops

1,141,415

1,501,268

Average trucks during the period***

1,551

1,873

 
 
Truckload
 
Loads

101,402

95,245

Revenue per load $

1,892

$

2,393

Average length of haul

659

543

 
Tractors (end of period)
Company-owned

33

165

Independent contractor

2,035

1,850

Total tractors

2,068

2,015

 
Trailers (end of period)

15,358

12,770

Average effective trailing equipment usage

13,108

9,928

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
 
Operating Statistics by Segment
(unaudited)
 
Six Months Ended June 30

2023

2022

 
Intermodal
 
Loads

987,772

1,049,760

Average length of haul

1,653

1,665

Revenue per load $

3,066

$

3,273

Average tractors during the period *

6,558

6,412

Tractors (end of period) *

6,491

6,620

Trailing equipment (end of period)

116,481

110,654

Average effective trailing equipment usage

96,061

107,372

 
 
Dedicated
 
Loads

2,182,268

2,220,631

Average length of haul

172

167

Revenue per truck per week** $

5,120

$

5,108

Average trucks during the period***

13,353

12,782

Trucks (end of period) ***

13,228

13,236

Trailing equipment (end of period)

29,773

27,108

Average effective trailing equipment usage

31,679

32,274

 
 
Integrated Capacity Solutions
 
Loads

397,166

534,040

Revenue per load $

1,834

$

2,368

Gross profit margin

13.3%

14.4%

Employee count (end of period)

769

1,022

Approximate number of third-party carriers (end of period)

144,600

154,800

Marketplace for J.B. Hunt 360 revenue (millions) $

475.6

$

822.4

 
 
Final Mile Services
 
Stops

2,303,553

2,902,982

Average trucks during the period***

1,601

1,761

 
 
Truckload
 
Loads

200,186

186,384

Revenue per load $

1,986

$

2,454

Average length of haul

650

548

 
Tractors (end of period)
Company-owned

33

165

Independent contractor

2,035

1,850

Total tractors

2,068

2,015

 
Trailers (end of period)

15,358

12,770

Average effective trailing equipment usage

13,118

9,452

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
June 30, 2023

December 31, 2022

ASSETS
Current assets:
Cash and cash equivalents $

295,929

$

51,927

Accounts Receivable, net

1,286,244

1,528,075

Prepaid expenses and other

555,407

631,776

Total current assets

2,137,580

2,211,778

Property and equipment

8,424,327

7,999,480

Less accumulated depreciation

2,940,246

3,019,663

Net property and equipment

5,484,081

4,979,817

Other assets, net

626,071

594,987

$

8,247,732

$

7,786,582

 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $

249,844

$

-

Trade accounts payable

767,428

798,776

Claims accruals

492,222

452,149

Accrued payroll

119,898

188,252

Other accrued expenses

139,132

129,054

Total current liabilities

1,768,524

1,568,231

 
Long-term debt

1,195,309

1,261,738

Other long-term liabilities

393,181

369,314

Deferred income taxes

978,795

920,531

Stockholders' equity

3,911,923

3,666,768

$

8,247,732

$

7,786,582

 
 
Supplemental Data
(unaudited)

 

June 30, 2023

December 31, 2022

 
Actual shares outstanding at end of period (000)

103,345

103,743

 
Book value per actual share outstanding at end of period $

37.85

$

35.34

 
 
 
Six Months Ended June 30

2023

2022

 
Net cash provided by operating activities (000) $

1,097,290

$

784,527

 
Net capital expenditures (000) $

853,778

$

598,094

 

Contacts

Brad Delco

Senior Vice President - Finance

(479) 820-2723

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