Shares of J.B. Hunt Transport Services Inc. experienced a decline after hours on Tuesday following the release of their third-quarter results, which fell short of Wall Street’s expectations. The trucking and transportation-services provider cited continued lower shipping demand as a contributing factor.
Financial Performance
In the third quarter, J.B. Hunt reported a net income of $187.4 million, equivalent to $1.80 per share, compared to $269.4 million, or $2.57 per share, during the same period last year. Meanwhile, revenue dropped to $3.16 billion from $3.84 billion in the prior-year quarter.
Analysts surveyed by FactSet had anticipated earnings per share of $1.83 and revenue of $3.17 billion.
Market Response
As a result of the disappointing results, shares fell by 1.8% after hours on Tuesday.
J.B. Hunt’s Services and Operations
J.B. Hunt owns its own trucks and trailers and provides services that bridge trucking and rail transportation. Additionally, they offer matchmaking services for businesses in need of shipping with companies specializing in transportation.
Impact of Industry Events
The release of J.B. Hunt’s results follows tense labor negotiations involving United Parcel Service Inc. (UPS) and major railroad operators, along with the bankruptcy of trucking company Yellow. These events have brought changes to the trucking market, leading to speculation about who may benefit from the current landscape.
Continued Subdued Shipping Demand
Despite recent industry developments, analysts note that shipping demand remains subdued. Retailers remain cautious in their product orders and shipments to stores due to consumer hesitation caused by higher prices, particularly for essential items like groceries. The resulting decline in demand for other products transported by the trucking and rail industries has led to reduced availability of trailers and lower prices.
Susquehanna Financial Group analyst Bascome Majors remarked in a research note this month, “In short, truckload is still long capacity and short pricing power into 2024. Against that backdrop, we believe management teams and investors are coming to terms with a ‘lower for longer’ reality and expect 2024 consensus forecasts to fall materially into and out of earnings season.”