On Wednesday, Benchmark reiterated its Buy rating and $185.00 price target on NASDAQ:JBHT, J.B. Hunt Transport Services, following the company's quarterly earnings report. J.B. Hunt disclosed a GAAP earnings per share (EPS) of $1.32, which fell short of the anticipated $1.48 by FactSet and $1.45 by Benchmark, due to an operating profit that did not meet expectations.
However, the company's JBI segment matched estimates, and its FMS division slightly exceeded projections.
The transport firm acknowledged a disappointing earnings miss after already lowering its forecasts prior to the quarter. However, J.B. Hunt observed more typical seasonal patterns, with the second quarter resembling pre-pandemic experiences. Despite a slow start in April attributed to Easter's timing, June witnessed a seasonal uptick in volume.
Intermodal volume shrank by 0.8%, aligning with expectations. The company benefited from increased west coast import activity, with transcontinental volume rising by 4% and Southern California seeing double-digit growth.
Contrastingly, volumes in the eastern regions continued to decline, dropping by 7%. Additionally, intermodal revenue per load faced challenges due to overcapacity in the truckload (TL) market, which has influenced recent bidding cycles.
Nonetheless, the second quarter's yield matched Benchmark's estimate. J.B. Hunt is currently managing $100 million in excess costs, which it anticipates utilizing more efficiently once demand rebounds.
Looking ahead, J.B. Hunt anticipates a peak season in 2023, though the extent and duration remain uncertain. The company has observed some preemptive purchasing in anticipation of potential supply chain disruptions later in the year.
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