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

  • Third Quarter 2023 Revenue: $3.16 billion; down 18%
  • Third Quarter 2023 Operating Income: $241.7 million; down 33%
  • Third Quarter 2023 EPS: $1.80 vs. $2.57; down 30% 

LOWELL, Ark.--()--J.B. Hunt Transport Services, Inc., (NASDAQ: JBHT) announced third quarter 2023 U.S. GAAP (United States Generally Accepted Accounting Principles) net earnings of $187.4 million, or diluted earnings per share of $1.80 versus third quarter 2022 net earnings of $269.4 million, or $2.57 per diluted share.

Total operating revenue for the current quarter was $3.16 billion, a decrease of 18% compared with $3.84 billion for the third quarter 2022. Current quarter total operating revenue, excluding fuel surcharge revenue, decreased 15% versus the comparable quarter 2022. This decrease was primarily driven by a 14% and 22% decrease in Intermodal (JBI) and Truckload (JBT) revenue per load (excluding fuel surcharge revenue) respectively, a 38% decrease in volume in Integrated Capacity Solutions (ICS), a 20% decrease in stops in Final Miles Services® (FMS), and a 1% decline in average revenue producing trucks in Dedicated Contract Services® (DCS®), partially offset by a 1% increase in JBI volumes and a 6% increase in JBT loads versus the prior-year period.

Operating income for the current quarter decreased 33% to $241.7 million versus $362.2 million for the third quarter 2022. Operating income decreased primarily due to lower revenue across all business segments, higher equipment-related costs, and higher insurance and claims expense compared to third quarter 2022. In addition, third quarter 2023 included an $8 million net loss from the sale of equipment compared to a negligible net gain in the prior-year quarter. On a consolidated basis, operating income as a percentage of consolidated gross revenue 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 as a percentage of gross revenue.

Net interest expense for the current quarter decreased modestly compared to third quarter 2022 due primarily to the interest component of a discrete income tax benefit recognized in the current quarter, partially offset by a higher average debt balance and higher interest rates.

The effective income tax rate in the current quarter was 18.2% versus 22.7% in the third quarter 2022. The decrease was due to the recording of a discrete benefit recognized in the current quarter. We expect our 2023 annual tax rate to be between 22.0% and 23.0%.

Acquisition Update:

On September 14, 2023, the Company announced it entered into a definitive agreement to purchase the brokerage operations of BNSF Logistics, LLC, which subsequently closed on September 30, 2023. For segment reporting purposes, the results of the operations acquired will be reflected in ICS beginning in the fourth quarter.

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)

  • Third Quarter 2023 Segment Revenue: $1.56 billion; down 15%
  • Third Quarter 2023 Operating Income: $128.0 million; down 41%

Intermodal volume increased 1% over the same period in 2022. Eastern network loads decreased 3%, while transcontinental loads increased 4%. Demand for our intermodal service improved throughout the quarter across both the Eastern and Transcontinental networks, supported by moderating destocking trends, seasonal activity, and strong performance from our rail providers. Segment gross revenue decreased 15% for the quarter versus the prior-year period, reflecting the 1% increase in volume which was more than offset by a 16% decrease in gross revenue per load, resulting from changes in the mix of freight, customer rates, and fuel surcharge revenue. Revenue per load excluding fuel surcharge revenue decreased 14% year-over-year.

Operating income decreased 41% in the third quarter primarily from lower revenue, which was only partially offset by the resulting impact of absorbing network and equipment costs with higher volume. JBl segment operating income as a percentage of segment gross revenue declined versus the prior-year period as a result of increases in professional driver and non-driver wages and benefits and higher equipment-related and maintenance expenses as a percentage of gross revenue. During the period, we successfully onboarded 906 net new pieces of trailing equipment. We ended the quarter with approximately 117,400 containers and 6,400 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Third Quarter 2023 Segment Revenue: $892 million; down 4%
  • Third Quarter 2023 Operating Income: $102.4 million; down 4%

DCS revenue decreased 4% during the current quarter over the same period 2022. Productivity (revenue per truck per week) decreased approximately 2% versus the prior period. Productivity excluding fuel surcharge revenue increased 2% from a year ago driven primarily by increases in contracted indexed­based price escalators. On a net basis, there were 370 fewer revenue producing trucks in the fleet by the end of the quarter compared to the prior-year period, and 31 more versus the end of the second quarter 2023. Customer retention rates are approximately 94%.

Operating income decreased 4% from the prior-year quarter primarily from higher equipment-related costs, insurance and claims expense, and a net $6.7 million year-over-year increase in loss on sale of equipment. These items were partially offset by the maturing of new business onboarded over the trailing twelve months.

Integrated Capacity Solutions (ICS)

  • Third Quarter 2023 Segment Revenue: $298 million; down 48%
  • Third Quarter 2023 Operating (Loss)/Income: $(9.4) million; vs. $13.4 million in Q3'22

ICS revenue declined 48% during the current quarter versus the third quarter 2022. Overall segment volume decreased 38% versus the prior-year period. Revenue per load decreased 17% compared to the third quarter 2022 due to lower contractual and transactional rates and changes in customer freight mix. Contractual volume represented approximately 68% of the total load volume and 67% of the total revenue in the current quarter compared to 49% and 52%, respectively, in third quarter 2022. Of the total reported ICS revenue, approximately $169 million was executed through the Marketplace for J.B. Hunt 360°® compared to $391 million in third quarter 2022.

Operating loss was $9.4 million compared to operating income of $13.4 million in the third quarter 2022. This change was due largely to lower gross profit, partially offset by lower personnel and technology costs. Gross profit declined 53% as a result of lower volume, revenue and gross profit margins compared to the prior-year period. Gross profit margins decreased to 12.8% in the current period versus 14.2% in the prior period. ICS’ carrier base decreased 17% year-over-year, largely driven by changes to carrier qualification requirements.

Final Mile Services (FMS)

  • Third Quarter 2023 Segment Revenue: $226 million; down 15%
  • Third Quarter 2023 Operating Income: $13.0 million; up 33%

FMS revenue decreased 15% compared to the same period 2022 primarily driven by efforts over the last twelve months to improve revenue quality on the overall business portfolio and general weakness in demand across many of the end markets 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 33% compared to the prior-year period primarily from internal efforts to improve revenue quality and manage costs. Higher revenue quality was partially offset by higher equipment-related expenses, technology investments, and inflationary increases in facility rental expenses.

Truckload (JBT)

  • Third Quarter 2023 Segment Revenue: $196 million; down 17%
  • Third Quarter 2023 Operating Income: $7.7 million; down 48%

JBT segment gross revenue decreased 17% compared to the same period in the previous year. Segment gross revenue excluding fuel surcharge revenue decreased 18% primarily due to a 22% decline in segment gross revenue per load excluding fuel surcharge revenue, partially offset by a 6% increase in load volume. Total average effective trailer count increased by approximately 1,900 units, or 18% versus the prior-year period. Trailer turns in the quarter were down 9% from the prior-year period primarily due to freight mix and weaker overall freight demand as compared to the third quarter 2022.

JBT segment operating income decreased 48% to $7.7 million versus the third quarter 2022. The decline in segment operating income was primarily driven by a decline in segment revenue. JBT segment operating income as a percentage of segment gross revenue declined year-over-year due to higher purchased transportation expense, equipment-related and maintenance expense, insurance costs, and higher technology expense as a percentage of segment 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.

Cash Flow and Capitalization:

At September 30, 2023, we had a total of $1.4 billion outstanding on various debt instruments compared to total debt of $1.2 billion at September 30, 2022, and $1.3 billion at December 31, 2022.

Our net capital expenditures for the nine months ended September 30, 2023, approximated $1.3 billion compared to $1.0 billion for the same period 2022. At September 30, 2023, we had cash and cash equivalents of approximately $75 million.

In the third quarter 2023, we purchased approximately 267,000 shares of our common stock for approximately $51 million. At September 30, 2023, we had approximately $416 million remaining under our share repurchase authorization. Actual shares outstanding on September 30, 2023, approximated 103.1 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 in-between. 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 September 30

2023

2022

% Of

% Of

Amount

Revenue

Amount

Revenue

 

 

Operating revenues, excluding fuel surcharge revenues

$

2,690,890

 

$

3,162,106

 

Fuel surcharge revenues

472,863

 

676,151

 

Total operating revenues

3,163,753

100.0%

3,838,257

100.0%

 

 

Operating expenses

 

 

Rents and purchased transportation

1,443,197

45.6%

1,891,848

49.3%

Salaries, wages and employee benefits

803,187

25.4%

887,723

23.1%

Fuel and fuel taxes

195,962

6.2%

242,379

6.3%

Depreciation and amortization

187,714

5.9%

166,580

4.3%

Operating supplies and expenses

130,905

4.1%

138,346

3.6%

Insurance and claims

62,675

2.0%

60,189

1.6%

General and administrative expenses, net of asset dispositions

69,413

2.3%

62,815

1.8%

Operating taxes and licenses

18,739

0.6%

17,082

0.4%

Communication and utilities

10,245

0.3%

9,067

0.2%

Total operating expenses

2,922,037

92.4%

3,476,029

90.6%

Operating income

241,716

7.6%

362,228

9.4%

Net interest expense

12,586

0.4%

13,562

0.3%

Earnings before income taxes

229,130

7.2%

348,666

9.1%

Income taxes

41,699

1.3%

79,284

2.1%

Net earnings

$

187,431

5.9%

$

269,382

7.0%

Average diluted shares outstanding

104,394

 

104,924

 

Diluted earnings per share

$

1.80

 

$

2.57

 

 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

Nine Months Ended September 30

2023

2022

% Of

% Of

Amount

Revenue

Amount

Revenue

 

 

Operating revenues, excluding fuel surcharge revenues $

8,140,959

 

$

9,364,082

 

Fuel surcharge revenues

1,385,006

 

1,800,295

 

Total operating revenues

9,525,965

100.0%

11,164,377

100.0%

 

 

Operating expenses

 

 

Rents and purchased transportation

4,315,581

45.3%

5,650,011

50.6%

Salaries, wages and employee benefits

2,450,062

25.7%

2,493,139

22.3%

Fuel and fuel taxes

563,642

5.9%

697,481

6.2%

Depreciation and amortization

543,498

5.7%

472,914

4.2%

Operating supplies and expenses

388,213

4.1%

371,668

3.3%

Insurance and claims

196,896

2.1%

193,577

1.7%

General and administrative expenses, net of asset dispositions

191,291

2.0%

160,026

1.7%

Operating taxes and licenses

55,797

0.6%

49,154

0.4%

Communication and utilities

31,067

0.3%

26,802

0.2%

Total operating expenses

8,736,047

91.7%

10,114,772

90.6%

Operating income

789,918

8.3%

1,049,605

9.4%

Net interest expense

41,980

0.4%

38,991

0.3%

Earnings before income taxes

747,938

7.9%

1,010,614

9.1%

Income taxes

173,186

1.9%

242,566

2.2%

Net earnings $

574,752

6.0%

$

768,048

6.9%

Average diluted shares outstanding

104,562

 

105,458

 

Diluted earnings per share $

5.50

 

$

7.28

 

 

 

 

 

Financial Information By Segment

(in thousands)

(unaudited)

 

 

Three Months Ended September 30

2023

2022

% Of

% Of

Amount

Total

Amount

Total

 

 

Revenue

 

 

 

 

Intermodal $

1,555,382

 

49%

$

1,836,603

 

48%

Dedicated

892,257

 

28%

930,947

 

24%

Integrated Capacity Solutions

298,015

 

9%

575,287

 

15%

Final Mile Services

225,929

 

8%

265,054

 

7%

Truckload

196,338

 

6%

236,620

 

6%

Subtotal

3,167,921

 

100%

3,844,511

 

100%

Intersegment eliminations

(4,168

)

(0%)

(6,254

)

(0%)

Consolidated revenue $

3,163,753

 

100%

$

3,838,257

 

100%

 

 

 

 

Operating income

 

 

 

 

Intermodal $

127,972

 

53%

$

216,992

 

60%

Dedicated

102,435

 

42%

107,186

 

30%

Integrated Capacity Solutions

(9,375

)

(4%)

13,351

 

4%

Final Mile Services

12,975

 

6%

9,773

 

2%

Truckload

7,715

 

3%

14,925

 

4%

Other (1)

(6

)

(0%)

1

 

0%

Operating income $

241,716

 

100%

$

362,228

 

100%

 

 

 

 

Nine Months Ended September 30

2023

2022

% Of

% Of

Amount

Total

Amount

Total

Revenue

 

 

 

 

Intermodal $

4,584,089

 

48%

$

5,272,767

 

47%

Dedicated

2,658,993

 

28%

2,610,993

 

23%

Integrated Capacity Solutions

1,026,480

 

11%

1,839,765

 

17%

Final Mile Services

674,945

 

7%

775,016

 

7%

Truckload

594,003

 

6%

694,058

 

6%

Subtotal

9,538,510

 

100%

11,192,599

 

100%

Intersegment eliminations

(12,545

)

(0%)

(28,222

)

(0%)

Consolidated revenue $

9,525,965

 

100%

$

11,164,377

 

100%

 

 

 

 

Operating income

 

 

 

 

Intermodal $

439,490

 

56%

$

620,493

 

59%

Dedicated

318,610

 

40%

281,018

 

27%

Integrated Capacity Solutions

(19,166

)

(2%)

60,767

 

6%

Final Mile Services

34,419

 

4%

23,611

 

2%

Truckload

16,503

 

2%

63,852

 

6%

Other (1)

62

 

0%

(136

)

(0%)

Operating income $

789,918

 

100%

$

1,049,605

 

100%

 

 

(1) Includes corporate support activity

 
Operating Statistics by Segment
(unaudited)
 
Three Months Ended September 30

2023

2022

 
Intermodal
 
Loads

521,221

 

515,178

 

Average length of haul

1,683

 

1,668

 

Revenue per load $

2,984

 

$

3,565

 

Average tractors during the period *

6,447

 

6,831

 

Tractors (end of period) *

6,398

 

6,872

 

Trailing equipment (end of period)

117,387

 

113,066

 

Average effective trailing equipment usage

96,248

 

109,215

 

 
 
Dedicated
 
Loads

1,070,626

 

1,164,792

 

Average length of haul

176

 

169

 

Revenue per truck per week** $

5,215

 

$

5,329

 

Average trucks during the period***

13,242

 

13,429

 

Trucks (end of period) ***

13,259

 

13,629

 

Trailing equipment (end of period)

31,253

 

27,937

 

Average effective trailing equipment usage

33,185

 

30,309

 

 
 
Integrated Capacity Solutions
 
Loads

163,745

 

262,803

 

Revenue per load $

1,820

 

$

2,189

 

Gross profit margin

12.8

%

14.2

%

Employee count (end of period)

680

 

1,002

 

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

131,600

 

158,600

 

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

168.5

 

$

391.1

 

 
 
Final Mile Services
 
Stops

1,123,435

 

1,405,290

 

Average trucks during the period***

1,487

 

1,870

 

 
 
Truckload
 
Loads

107,149

 

101,178

 

Revenue per load $

1,832

 

$

2,339

 

Average length of haul

644

 

594

 

 
Tractors (end of period)
Company-owned

29

 

180

 

Independent contractor

1,960

 

1,960

 

Total tractors

1,989

 

2,140

 

 
Trailers (end of period)

15,031

 

13,751

 

Average effective trailing equipment usage

12,869

 

10,938

 

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

2023

2022

 
Intermodal
 
Loads

1,508,993

 

1,564,938

 

Average length of haul

1,663

 

1,666

 

Revenue per load $

3,038

 

$

3,369

 

Average tractors during the period *

6,521

 

6,552

 

Tractors (end of period) *

6,398

 

6,872

 

Trailing equipment (end of period)

117,387

 

113,066

 

Average effective trailing equipment usage

94,458

 

107,987

 

 
 
Dedicated
 
Loads

3,252,894

 

3,385,423

 

Average length of haul

173

 

168

 

Revenue per truck per week** $

5,152

 

$

5,185

 

Average trucks during the period***

13,316

 

12,998

 

Trucks (end of period) ***

13,259

 

13,629

 

Trailing equipment (end of period)

31,253

 

27,937

 

Average effective trailing equipment usage

32,181

 

31,619

 

 
 
Integrated Capacity Solutions
 
Loads

560,912

 

796,844

 

Revenue per load $

1,830

 

$

2,309

 

Gross profit margin

13.1

%

14.3

%

Employee count (end of period)

680

 

1,002

 

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

131,600

 

158,600

 

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

644.1

 

$

1,213.5

 

 
 
Final Mile Services
 
Stops

3,426,988

 

4,308,272

 

Average trucks during the period***

1,563

 

1,797

 

 
 
Truckload
 
Loads

307,336

 

287,562

 

Revenue per load $

1,933

 

$

2,414

 

Average length of haul

648

 

564

 

 
Tractors (end of period)
Company-owned

29

 

180

 

Independent contractor

1,960

 

1,960

 

Total tractors

1,989

 

2,140

 

 
Trailers (end of period)

15,031

 

13,751

 

Average effective trailing equipment usage

13,035

 

10,007

 

 
 
* 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)
 
September 30, 2023 December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents $

75,198

$

51,927

Accounts Receivable, net

1,369,974

1,528,075

Prepaid expenses and other

525,002

631,776

Total current assets

1,970,174

2,211,778

Property and equipment

8,660,207

7,999,480

Less accumulated depreciation

2,942,438

3,019,663

Net property and equipment

5,717,769

4,979,817

Other assets, net

685,027

594,987

$

8,372,970

$

7,786,582

 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $

249,902

$

-

Trade accounts payable

808,803

798,776

Claims accruals

480,963

452,149

Accrued payroll

98,438

188,252

Other accrued expenses

140,970

129,054

Total current liabilities

1,779,076

1,568,231

 
Long-term debt

1,195,708

1,261,738

Other long-term liabilities

393,564

369,314

Deferred income taxes

986,520

920,531

Stockholders' equity

4,018,102

3,666,768

$

8,372,970

$

7,786,582

 
Supplemental Data
(unaudited)
 

September 30, 2023

December 31, 2022

 
Actual shares outstanding at end of period (000)

103,143

103,743

 
Book value per actual share outstanding at end of period $

38.96

$

35.34

 
 
 
Nine Months Ended September 30

2023

2022

 
Net cash provided by operating activities (000) $

1,529,612

$

1,355,406

 
Net capital expenditures (000) $

1,319,905

$

1,018,028

 

Contacts

Brad Delco
Senior Vice President – Finance
(479) 820-2723

Contacts

Brad Delco
Senior Vice President – Finance
(479) 820-2723