01—Abstract
Summary
Summary of the 10-Q filed April 26, 2024. Cited figures are marked; the original filing is the authoritative source.
J.B.
Hunt Transport Services, Inc. (JBHT) reported first-quarter 2024 total operating revenues of $2.94 billiona, down 9% from $3.23 billion in the first quarter 2023, with decreases in JBI and JBT revenue per load, lower ICS volumes, and slightly lower DCS truck count and productivity, partially offset by FMS growth. Operating income fell to $194.4 million from $277.5 million, and net earnings declined to $127.5 million from $197.8 million. Diluted earnings per share were $1.22 versus $1.89 a year earlier.
The filing notes that the net earnings margin was 4.3% compared with 6.1% in the prior-year quarter. The Integrated Capacity Solutions (ICS) segment swung to an operating loss of $17.5 millionb from a $5.4 million loss, driven by a 21% decrease in gross profit and higher insurance expense, while Intermodal (JBI) operating income dropped 40% to $101.9 million. The Final Mile Services (FMS) segment was the only one to grow operating income, to $15.1 million from $6.6 million.
Net cash provided by operating activities was $466.5 millionc, and net capital expenditures were approximately $166.2 million, with management expecting $800 million to $1.0 billion for full-year 2024. Balance sheet activity included repayment of the $250 million 3.85% senior notes at maturity in March 2024, leaving $1.37 billion of long-term debt, and cash of $64.2 million. The company repurchased about 126,000 shares for $25.1 million during the quarter, with $366 million remaining under its authorization.
The Board declared a $0.43d quarterly dividend in April 2024. Management stated the company was in compliance with all debt covenants and expects its liquidity sources to meet requirements for the foreseeable future.
02—Key points
Key Highlights
- Total operating revenues were $2.94 billion, down 9% from $3.23 billion in Q1 2023, with operating revenue excluding fuel surcharge down 7%.
- Operating income declined to $194.4 million from $277.5 million, and net earnings fell to $127.5 million from $197.8 million.
- Diluted EPS was $1.22 compared with $1.89 in the prior-year quarter; the net earnings margin was 4.3% versus 6.1%.
- ICS posted a $17.5 million operating loss versus a $5.4 million loss a year earlier, with ICS revenue down 26% and gross profit down 21%.
- JBI operating income fell 40% to $101.9 million, while FMS operating income rose to $15.1 million from $6.6 million.
- The $250 million 3.85% senior notes matured and were repaid in March 2024; total long-term debt was $1.37 billion at quarter end.
- Full-year 2024 net capital expenditures are expected to be $800 million to $1.0 billion, and the company repurchased $25.1 million of stock during the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 26, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $2.94B$3.23B | −8.8% |
| Operating Expenses | $2.75B$2.95B | −6.9% |
| Operating Income | $194.37M$277.49M | −30.0% |
| Interest Expense | $15.65M$14.79M | +5.8% |
| Net Income | $127.49M$197.77M | −35.5% |
| EPS (Basic) | $1.23$1.91 | −35.6% |
| EPS (Diluted) | $1.22$1.89 | −35.4% |
| Shares Outstanding (Basic) | 103.24M103.72M | −0.5% |
| Shares Outstanding (Diluted) | 104.11M104.73M | −0.6% |
05—Questions
Frequently Asked Questions
Why did J.B. Hunt's earnings decline in the first quarter of 2024?
Operating revenues fell 9% to $2.94 billion, mainly from lower revenue per load in JBI and JBT, lower ICS volumes, and slightly lower DCS truck count and productivity. Operating expenses fell 6.9%, but not enough to offset the revenue decline, so operating income dropped to $194.4 million from $277.5 million.
Which business segments were weakest this quarter?
ICS had the largest deterioration, with revenue down 26% to $285 million and an operating loss of $17.5 million, driven by a 21% drop in gross profit and higher insurance expense. JBI operating income fell 40% to $101.9 million, and JBT operating income fell 75% to $1.2 million. FMS was the exception, with operating income rising to $15.1 million.
How is J.B. Hunt's balance sheet and liquidity position?
The company had $64.2 million of cash and $1.37 billion of long-term debt at March 31, 2024. It repaid $250 million of 3.85% senior notes at maturity and had $170 million outstanding on its revolving credit line plus a $500 million term loan balance. Management stated it was in compliance with all covenants and believes its liquidity is sufficient for the foreseeable future.
What are the company's capital allocation plans?
Net capital expenditures were about $166.2 million in the first quarter, and management expects $800 million to $1.0 billion for full-year 2024. The company repurchased about 126,000 shares for $25.1 million, leaving $366 million under its $500 million authorization. The Board declared a $0.43 quarterly dividend payable May 24, 2024.
What did the company say about its tax rate and guidance?
The effective income tax rate was 28.7% in the first quarter, up from 24.7% a year earlier, due to discrete tax items. The company expects its annual tax rate for 2024 to be between 24.0% and 25.0%.
06—Continue