JB Hunt Transport Services (JBHT 107.39, -0.95) has given up 0.9% after reporting mixed results for the third quarter.
The freight shipping company reported below-consensus third quarter earnings of $0.91 per share on an 8.9% year-over-year increase in revenue to $1.84 billion, which exceeded expectations.
Intermodal revenue grew 8.0% year-over-year to $1.05 billion with volumes increasing 6.0%. Realized load growth in the Eastern Network checked in at 2.0% while transcontinental loads increased 8.0% year-over-year. Disruptions associated with Hurricanes Harvey, Irma, and Maria prevented the company from handling 5,500 loads. Revenue per load increased 2.0% due to changes in customer rate, freight mix, and fuel surcharges. Segment operating income fell 7.0% to $109.10 million as benefits from improved volumes were offset by higher costs to attract and retain drivers, higher insurance costs, and higher rates for rail purchased transportation.
Dedicated Contract Services revenue increased 11.0% to $438 million. Productivity increased 2.0% year-over-year while productivity excluding fuel surcharge revenue was unchanged. The company had 1,024 more revenue producing trucks than it did in the same quarter a year ago. Customer retention rates held above 98.0%. Segment operating income declined 18.0% to $42.90 million. Higher insurance costs, driver recruiting costs, and salaries contributed to the decline.
Integrated Capacity Solutions revenue rose 16.0% to $269 million. Revenue per load rose 17.0% due to higher spot market activity while volumes decreased 1.0% year-over-year. Contractual volumes made 65.0% of total load volumes, down from 75.0% of total load volumes one year ago. Segment operating income fell 14.0% to $7.30 million. Higher technology development costs and higher number of branches open less than two years outweighed an increase in revenue.
Truck revenue declined 5.0% to $93 million due to a lower load count. Revenue per load grew 1.0% thanks to a 4.0% increase in rates per loaded mile, which offset a 3.0% decrease in length of haul. The company operated 2,040 tractors at the end of the quarter, down from 2,183 one year ago. Segment operating income rose 12.0% to $5.70 million as favorable changes from higher rates per loaded mile and lower insurance costs were partially offset by higher driver wages and higher independent contractor costs per mile.