01—Abstract
Summary
Summary of the 10-Q filed July 26, 2024. Cited figures are marked; the original filing is the authoritative source.
J.B.
Hunt Transport Services, Inc. (JBHT) reported lower results for the second quarter and first six months of 2024. Total operating revenues were $2.93 billiona in the second quarter, a 7% decrease from $3.13 billion a year earlier, and $5.87 billion for the first six months, an 8% decrease. Operating income fell to $205.7 million in the quarter from $270.7 million, and net earnings fell to $135.9 million from $189.6 million.
Diluted earnings per share were $1.32b versus $1.81 in the prior-year quarter. The filing attributes the revenue decline mainly to lower revenue per load in Intermodal (JBI) and lower volumes in ICS, JBT and DCS, partially offset by growth in FMS. The Integrated Capacity Solutions (ICS) segment posted an operating loss of $13.3 million in the second quarter, versus a $4.4 million loss a year earlier, though its gross profit margin improved to 14.8% from 13.0%.
Intermodal operating income declined 31% to $99.2 millionc, and Dedicated Contract Services (DCS) operating income fell 15% to $96.4 million. The company remains active in capital returns: it repurchased about $203.1 million of stock in the second quarter and paid $0.43 quarterly dividends, while $163 million remained under its repurchase authorization. Balance sheet and liquidity remained solid.
Cash and equivalents were $53.5 milliond at June 30, 2024, and the company repaid a $250 million senior note at maturity in March 2024. Net cash from operating activities was $827 million for the first six months, down from $1.10 billion, and net capital expenditures were about $408.9 million, with 2024 guidance of $650 million to $700 million. Management stated it was in compliance with all debt covenants and expects its 2024 annual tax rate to be between 24.0% and 25.0%.
02—Key points
Key Highlights
- Total operating revenues were $2.93 billion in Q2 2024, down 7% from $3.13 billion in Q2 2023; six-month revenues were $5.87 billion, down 8%.
- Operating income declined to $205.7 million in Q2 2024 from $270.7 million, and net earnings fell to $135.9 million from $189.6 million.
- Diluted EPS was $1.32 for Q2 2024 versus $1.81 a year earlier; six-month diluted EPS was $2.54 versus $3.70.
- ICS segment posted a $13.3 million operating loss in Q2 2024 versus a $4.4 million loss, while its gross profit margin rose to 14.8% from 13.0%.
- JBI operating income fell 31% to $99.2 million and DCS operating income fell 15% to $96.4 million in Q2 2024.
- Operating cash flow was $827 million for the first six months of 2024, down from $1.10 billion, and 2024 net capital expenditures are expected to be $650 million to $700 million.
- The company repurchased $203.1 million of stock in Q2 2024 and paid $0.43 quarterly dividends, with $163 million remaining under its repurchase authorization.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 26, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $2.93B$3.13B | −6.5% |
| Operating Expenses | $2.72B$2.86B | −4.9% |
| Operating Income | $205.71M$270.71M | −24.0% |
| Interest Expense | $20.20M$14.60M | +38.3% |
| Net Income | $135.87M$189.55M | −28.3% |
| EPS (Basic) | $1.33$1.83 | −27.3% |
| EPS (Diluted) | $1.32$1.81 | −27.1% |
| Shares Outstanding (Basic) | 102.39M103.56M | −1.1% |
| Shares Outstanding (Diluted) | 103.15M104.57M | −1.4% |
05—Questions
Frequently Asked Questions
Why did J.B. Hunt's revenue and earnings decline in the second quarter of 2024?
The filing attributes the 7% revenue decline mainly to decreased revenue per load in JBI and lower volumes in ICS, JBT and DCS. Operating expenses fell 4.9%, but not as much as revenue, so operating income dropped to $205.7 million from $270.7 million.
How did the ICS segment perform?
ICS revenue decreased 21% to $270 million, and it posted an operating loss of $13.3 million versus $4.4 million a year earlier. Overall volumes fell 25%, while revenue per load rose 5% and gross profit margin improved to 14.8% from 13.0%. The loss increase was attributed mainly to an 11% decrease in gross profit, higher insurance and claims expense, and integration costs related to the purchase of BNSF Logistics brokerage assets.
Is the company's debt and liquidity position stable?
At June 30, 2024, long-term debt was $1.48 billion, consisting of a $785.2 million senior credit facility balance and $698.6 million of senior notes. The company repaid a $250 million note at maturity in March 2024, held $53.5 million of cash, and stated it was in compliance with all covenants. Management believes liquid assets, operating cash flow and the revolving credit line are sufficient for foreseeable needs.
What are the company's capital return and capital spending plans?
In the first six months of 2024, the company purchased $228.3 million of stock, including $203.1 million in Q2, and declared a $0.43 quarterly dividend, most recently on July 17, 2024. It had $163 million remaining under its repurchase authorization. For full-year 2024, it expects net capital expenditures of $650 million to $700 million.
What is the company's expected tax rate for 2024?
Management expects its annual tax rate for 2024 to be between 24.0% and 25.0%. The effective tax rate was 26.8% for Q2 2024 and 27.7% for the first six months of 2024, which the filing attributes to discrete tax items in the six-month period.
06—Continue