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J.B. Hunt Transport Services, Inc. Reports U.S. GAAP Revenues, Net Earnings and Earnings Per Share for the Third Quarter 2022

  • Third Quarter 2022 Revenue: $3.84 billion; up 22%
  • Third Quarter 2022 Operating Income: $362.2 million; up 32%
  • Third Quarter 2022 EPS: $2.57 vs. $1.88; up 37%

J.B. Hunt Transport Services, Inc., (NASDAQ: JBHT) announced third quarter 2022 U.S. GAAP (United States Generally Accepted Accounting Principles) net earnings of $269.4 million, or diluted earnings per share of $2.57 versus third quarter 2021 net earnings of $199.8 million, or $1.88 per diluted share.

Total operating revenue for the current quarter was $3.84 billion, an increase of 22% compared with $3.14 billion for the third quarter 2021. Current quarter total operating revenue, excluding fuel surcharge revenue, increased 12% versus the comparable quarter 2021. This increase was primarily driven by a 17% increase in Intermodal (JBI) revenue per load (excluding fuel surcharge revenue), an 18% increase in average revenue producing trucks in Dedicated Contract Services® (DCS®), a 13% increase in Truckload (JBT) volume, and an increase in Final Mile Services® (FMS) revenue driven primarily by our recent acquisition, partially offset by an 8% decrease in volume in Integrated Capacity Solutions (ICS).

Total freight transactions in the Marketplace for J.B. Hunt 360® increased 7% to $552 million in the third quarter 2022 compared to $519 million in the prior year quarter. JBT and JBI executed approximately $123 million and $38 million of their third-party dray, independent contractor and power-only capacity costs through the platform during the quarter, an increase of 41% and 10% year over year respectively. ICS revenue on the platform decreased 2% to $391 million versus the year ago period.

Operating income for the current quarter totaled $362.2 million versus $273.8 million for the third quarter 2021. Operating income increased from third quarter 2021 primarily from customer rate and cost-recovery efforts and higher volume specific to our DCS, JBI, and JBT business units compared to the prior year period. These items were partially offset by higher rail and truck purchased transportation costs; increases in investments to attract and retain professional drivers, office personnel, and maintenance technicians; higher equipment-related and maintenance expense; and costs associated with inefficiencies in container utilization in JBI and the onboarding of newly awarded business in both DCS and FMS.

Net interest expense for the current quarter increased from third quarter 2021 due primarily to higher interest rates and debt issuance costs compared to the same period last year.

The effective income tax rate in the current quarter was 22.7% versus 23.7% in the third quarter 2021. We expect our 2022 annual tax rate to be between 23.5% and 24.0%.

Segment Information:

Intermodal (JBI)

  • Third Quarter 2022 Segment Revenue: $1.84 billion; up 30%
  • Third Quarter 2022 Operating Income: $217.0 million; up 31%

Intermodal volume increased 4% over the same period in 2021. Eastern network loads increased 7%, while transcontinental loads increased 1%. During the quarter, we continued to experience growth in demand for intermodal services but volume was negatively impacted by rail velocity challenges, customer detention of equipment, and overall supply chain uncertainties facing our customers. As the quarter progressed, rail velocity and service levels improved notably to the best levels experienced since early 2021. Revenue increased 30% for the quarter versus the prior year period, driven by a 26% increase in revenue per load and the 4% increase in load volume. Excluding fuel surcharge revenue, revenue per load increased 17% versus the prior year period.

Operating income increased by 31% year over year primarily from higher customer rate and cost recovery efforts and volume. These items were partially offset by higher rail purchased transportation expense; investments to attract and retain professional drivers, office personnel, and maintenance technicians; and higher equipment-related and maintenance expense. Additionally, network inefficiencies driven by rail velocity and customer detention of equipment continue to impact unit cost per load. During the period we successfully onboarded 2,400 new units of container capacity. The current period ended with approximately 113,000 units of trailing capacity and 6,870 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Third Quarter 2022 Segment Revenue: $894 million; up 34%
  • Third Quarter 2022 Operating Income: $103.1 million; up 32%

Demand for our highly engineered private-fleet outsourcing solution remained strong during the quarter. DCS revenue increased 34% year over year, primarily from an 18% increase in average revenue producing trucks and a 14% increase in productivity (revenue per truck per week) versus the same period 2021. Productivity excluding fuel surcharge revenue increased 6% from a year ago driven by increases in contracted indexed-based price escalators and stronger utilization of equipment. A net additional 1,836 revenue producing trucks were in the fleet by the end of the quarter compared to the prior year period, and a net additional 458 versus the end of the second quarter 2022. Customer retention rates remain above 98%.

Operating income increased 32% from the prior year quarter, primarily from new business onboarded over the past trailing twelve months, combined with greater productivity and utilization of equipment. These items were partially offset by costs to attract and retain professional drivers, office personnel, and maintenance technicians, higher equipment-related and maintenance expense, and other costs related to the implementation of new, long-term contractual business.

Integrated Capacity Solutions (ICS)

  • Third Quarter 2022 Segment Revenue: $591 million; down 11%
  • Third Quarter 2022 Operating Income: $13.5 million; down 8%

ICS revenue declined 11% in the current quarter versus the third quarter 2021. Overall segment volume decreased 8% in the quarter, while truckload volume was down 1% compared to the prior year. Revenue per load decreased 4% compared to the third quarter 2021. Higher contractual rates in our truckload business and changes in customer freight mix were more than offset by lower revenue per load in our transactional business. Contractual volume represented approximately 57% of the total load volume and 53% of the total revenue in the current quarter compared to 54% and 41%, respectively, in third quarter 2021. Of the total reported ICS revenue, approximately $391 million was executed through the Marketplace for J.B. Hunt 360 compared to $397 million in third quarter 2021.

Gross profit margins increased to 14.3% in the current period versus 12.0% in the prior period, driving a 5.9% increase in gross profit versus the prior year period. Higher gross profit was more than offset by higher personnel and technology-related investments, increased bad debt expense, and higher insurance and claims expense. ICS carrier base increased 25% versus the third quarter 2021.

Truckload (JBT)

  • Third Quarter 2022 Segment Revenue: $274 million; up 34%
  • Third Quarter 2022 Operating Income: $19.0 million; up 30%

JBT revenue increased 34% as compared to the same period in the previous year. Revenue excluding fuel surcharge revenue increased 24% primarily due to increased load volume and higher revenue per load excluding fuel surcharge revenue. Volume was up 13% year over year as average total trailer count increased by approximately 3,800 units, or 40% versus the prior year period. Trailer turns in the quarter were down 18% from the prior year period due to the onboarding of new trailers and freight mix. Revenue per load excluding fuel surcharge revenue was up 10% on an average length of haul that also increased 10%.

JBT operating income increased 30% to $19.0 million versus the third quarter 2021. JBT continues to leverage the J.B. Hunt 360 platform to grow power capacity and capability for the J.B. Hunt 360box® service offering. Benefits from higher volume and revenue were partially offset by higher truck purchased transportation expense, equipment-related and maintenance expense, investments in personnel, insurance and claims expense and continued technology-related investments to build out 360box.

Final Mile Services (FMS)

  • Third Quarter 2022 Segment Revenue: $249 million; up 21%
  • Third Quarter 2022 Operating Income: $9.6 million; compared to $1.3 million in 3Q’21

FMS revenue increased 21% compared to the same period 2021, primarily driven by the previously announced acquisition of Zenith Freight Lines, LLC (Zenith) and multiple new customer contracts implemented over the past trailing twelve months. Revenue growth was partially offset by internal efforts to improve revenue quality of the business. Excluding the Zenith acquisition, which contributed approximately $28 million to segment revenue in the current quarter, FMS revenue increased 7% year over year.

Operating income increased to $9.6 million compared to $1.3 million in the prior year period. The increase in operating income was primarily driven by an improvement in revenue quality partially offset by increases in investments to attract and retain professional driver and non-driver personnel, higher equipment-related and maintenance costs, and increased insurance and claims expense. Additionally, investments in new system technology development and implementation costs for newly awarded business partially offset the improvement in revenue quality.

Cash Flow and Capitalization:

At September 30, 2022, we had a total of $1.2 billion outstanding on various debt instruments compared to total debt of $1.3 billion at September 30, 2021, and December 31, 2021.

Our net capital expenditures for the nine months ended September 30, 2022, approximated $1.0 billion compared to $511 million for the same period 2021. At September 30, 2022, we had cash and cash equivalents of approximately $84 million.

In the third quarter 2022, we purchased approximately 349,000 shares of our common stock for approximately $61 million. At September 30, 2022, we had approximately $551 million remaining under our share repurchase authorization. Actual shares outstanding on September 30, 2022, approximated 103.5 million.

Conference Call Information:

The Company will hold a conference call today from 4:00–5:00 pm CDT to discuss the quarterly earnings. Investors will have the opportunity to listen to the conference call live over the internet by going to investor.jbhunt.com. Please log on 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an online replay of the earnings call webcast will be available a few hours after the completion of the call.

Forward-Looking Statements:

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2021. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available to interested parties on our website, www.jbhunt.com.

About J.B. Hunt

J.B. Hunt Transport Services, Inc., a Fortune 500 and S&P 500 company, provides innovative supply chain solutions for a variety of customers throughout North America. Utilizing an integrated, multimodal approach, the company applies technology driven methods to create the best solution for each customer, adding efficiency, flexibility, and value to their operations. J.B. Hunt services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, last mile, and more. J.B. Hunt Transport Services, Inc. stock trades on NASDAQ under the ticker symbol JBHT and is a component of the Dow Jones Transportation Average. J.B. Hunt Transport, Inc. is a wholly owned subsidiary of JBHT. For more information, visit www.jbhunt.com.

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended September 30

2022

2021

% Of

% Of

Amount

Revenue

Amount

Revenue

 

 

Operating revenues, excluding fuel surcharge revenues $

3,162,106

 

$

2,813,939

 

Fuel surcharge revenues

676,151

 

330,873

 

Total operating revenues

3,838,257

100.0%

3,144,812

100.0%

 

 

Operating expenses

 

 

Rents and purchased transportation

1,891,848

49.3%

1,667,236

53.0%

Salaries, wages and employee benefits

887,723

23.1%

711,694

22.6%

Fuel and fuel taxes

242,379

6.3%

139,155

4.4%

Depreciation and amortization

166,580

4.3%

138,923

4.4%

Operating supplies and expenses

138,346

3.6%

98,541

3.1%

Insurance and claims

60,189

1.6%

41,254

1.3%

General and administrative expenses, net of asset dispositions

62,815

1.8%

50,266

1.7%

Operating taxes and licenses

17,082

0.4%

15,464

0.5%

Communication and utilities

9,067

0.2%

8,450

0.3%

Total operating expenses

3,476,029

90.6%

2,870,983

91.3%

Operating income

362,228

9.4%

273,829

8.7%

Net interest expense

13,562

0.3%

11,977

0.4%

Earnings before income taxes

348,666

9.1%

261,852

8.3%

Income taxes

79,284

2.1%

62,023

1.9%

Net earnings $

269,382

7.0%

$

199,829

6.4%

Average diluted shares outstanding

104,924

 

106,436

 

Diluted earnings per share $

2.57

 

$

1.88

 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

Nine Months Ended September 30

2022

2021

% Of

% Of

Amount

Revenue

Amount

Revenue

 

 

Operating revenues, excluding fuel surcharge revenues $

9,364,082

 

$

7,808,954

 

Fuel surcharge revenues

1,800,295

 

862,377

 

Total operating revenues

11,164,377

100.0%

8,671,331

100.0%

 

 

Operating expenses

 

 

Rents and purchased transportation

5,650,011

50.6%

4,557,770

52.6%

Salaries, wages and employee benefits

2,493,139

22.3%

1,997,196

23.0%

Fuel and fuel taxes

697,481

6.2%

379,036

4.4%

Depreciation and amortization

472,914

4.2%

415,839

4.8%

Operating supplies and expenses

371,668

3.3%

271,257

3.1%

Insurance and claims

193,577

1.7%

114,792

1.3%

General and administrative expenses, net of asset dispositions

160,026

1.7%

142,662

1.7%

Operating taxes and licenses

49,154

0.4%

43,488

0.5%

Communication and utilities

26,802

0.2%

26,264

0.3%

Total operating expenses

10,114,772

90.6%

7,948,304

91.7%

Operating income

1,049,605

9.4%

723,027

8.3%

Net interest expense

38,991

0.3%

36,061

0.4%

Earnings before income taxes

1,010,614

9.1%

686,966

7.9%

Income taxes

242,566

2.2%

168,369

1.9%

Net earnings $

768,048

6.9%

$

518,597

6.0%

Average diluted shares outstanding

105,458

 

106,688

 

Diluted earnings per share $

7.28

 

$

4.86

 

 

 

 

Financial Information By Segment

(in thousands)

(unaudited)

 

 

Three Months Ended September 30

2022

2021

% Of

% Of

Amount

Total

Amount

Total

 

 

Revenue

 

 

 

 

Intermodal $

1,836,603

 

48%

$

1,412,806

 

45%

Dedicated

893,998

 

23%

664,766

 

21%

Integrated Capacity Solutions

590,977

 

15%

666,217

 

21%

Truckload

273,569

 

7%

203,607

 

6%

Final Mile Services

249,364

 

7%

205,908

 

7%

Subtotal

3,844,511

 

100%

3,153,304

 

100%

Intersegment eliminations

(6,254

)

(0%)

(8,492

)

0%

Consolidated revenue $

3,838,257

 

100%

$

3,144,812

 

100%

 

 

 

 

Operating income

 

 

 

 

Intermodal $

216,992

 

60%

$

165,095

 

60%

Dedicated

103,075

 

28%

78,138

 

29%

Integrated Capacity Solutions

13,510

 

4%

14,748

 

5%

Truckload

19,036

 

5%

14,664

 

5%

Final Mile Services

9,614

 

3%

1,278

 

1%

Other (1)

1

 

0%

(94

)

0%

Operating income $

362,228

 

100%

$

273,829

 

100%

 

 

 

 

Nine Months Ended September 30

2022

 

2021

 

% Of

% Of

Amount

Total

Amount

Total

Revenue

 

 

 

 

Intermodal $

5,272,767

 

47%

$

3,879,338

 

45%

Dedicated

2,498,343

 

22%

1,865,903

 

21%

Integrated Capacity Solutions

1,889,600

 

17%

1,798,778

 

21%

Truckload

806,708

 

7%

536,772

 

6%

Final Mile Services

725,182

 

7%

620,056

 

7%

Subtotal

11,192,600

 

100%

8,700,847

 

100%

Intersegment eliminations

(28,223

)

(0%)

(29,516

)

0%

Consolidated revenue $

11,164,377

 

100%

$

8,671,331

 

100%

 

 

 

 

Operating income

 

 

 

 

Intermodal $

620,493

 

59%

$

407,203

 

56%

Dedicated

269,376

 

26%

231,487

 

32%

Integrated Capacity Solutions

62,097

 

6%

25,134

 

3%

Truckload

75,494

 

7%

39,033

 

6%

Final Mile Services

22,282

 

2%

20,467

 

3%

Other (1)

(137

)

(0%)

(297

)

0%

Operating income $

1,049,605

 

100%

$

723,027

 

100%

 

 

(1) Includes corporate support activity
 
Operating Statistics by Segment
(unaudited)
 
Three Months Ended September 30

2022

2021

 
Intermodal
 
Loads

515,178

497,603

Average length of haul

1,668

1,677

Revenue per load $

3,565

$

2,839

Average tractors during the period *

6,831

5,956

Tractors (end of period) *

6,872

6,017

Trailing equipment (end of period)

113,066

102,230

Average effective trailing equipment usage

109,215

99,453

 
 
Dedicated
 
Loads

1,141,312

1,027,705

Average length of haul

165

161

Revenue per truck per week** $

5,342

$

4,692

Average trucks during the period***

12,863

10,887

Trucks (end of period) ***

13,086

11,250

Trailing equipment (end of period)

27,937

27,804

 
 
Integrated Capacity Solutions
 
Loads

312,947

339,867

Revenue per load $

1,888

$

1,960

Gross profit margin

14.3%

12.0%

Employee count (end of period)

1,026

954

Approximate number of third-party carriers (end of period)

158,600

126,700

Marketplace for J.B. Hunt 360 revenue (millions) $

391.1

$

397.4

 
 
Truckload
 
Loads

124,658

110,430

Average trailers during the period

13,207

9,438

Revenue per load $

2,195

$

1,844

Average length of haul

549

498

 
Tractors (end of period)
Company-owned

713

750

Independent contractor

1,971

1,215

Total tractors

2,684

1,965

 
Trailers (end of period)

13,751

9,906

 
 
Final Mile Services
 
Stops

1,355,146

1,554,485

Average trucks during the period***

1,870

1,512

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
 
Operating Statistics by Segment
(unaudited)
 
Nine Months Ended September 30

2022

2021

 
Intermodal
 
Loads

1,564,938

1,475,570

Average length of haul

1,666

1,681

Revenue per load $

3,369

$

2,629

Average tractors during the period *

6,552

5,818

Tractors (end of period) *

6,872

6,017

Trailing equipment (end of period)

113,066

102,230

Average effective trailing equipment usage

107,987

97,422

 
 
Dedicated
 
Loads

3,304,208

2,966,575

Average length of haul

164

161

Revenue per truck per week** $

5,198

$

4,662

Average trucks during the period***

12,407

10,357

Trucks (end of period) ***

13,086

11,250

Trailing equipment (end of period)

27,937

27,804

 
 
Integrated Capacity Solutions
 
Loads

963,345

962,359

Revenue per load $

1,961

$

1,869

Gross profit margin

14.5%

11.6%

Employee count (end of period)

1,026

954

Approximate number of third-party carriers (end of period)

158,600

126,700

Marketplace for J.B. Hunt 360 revenue (millions) $

1,213.5

$

1,152.4

 
 
Truckload
 
Loads

368,777

322,030

Average trailers during the period

12,266

8,890

Revenue per load $

2,188

$

1,667

Average length of haul

510

476

 
Tractors (end of period)
Company-owned

713

750

Independent contractor

1,971

1,215

Total tractors

2,684

1,965

 
Trailers (end of period)

13,751

9,906

 
 
Final Mile Services
 
Stops

4,141,771

4,963,472

Average trucks during the period***

1,797

1,505

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
September 30, 2022 December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents $

84,334

$

355,549

Accounts Receivable, net

1,726,155

1,506,619

Prepaid expenses and other

341,927

451,201

Total current assets

2,152,416

2,313,369

Property and equipment

7,680,238

6,680,316

Less accumulated depreciation

2,972,231

2,612,661

Net property and equipment

4,708,007

4,067,655

Other assets, net

571,136

413,324

$

7,431,559

$

6,794,348

 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $

-

$

355,972

Trade accounts payable

838,859

772,736

Claims accruals

340,207

307,210

Accrued payroll

208,707

190,950

Other accrued expenses

112,951

102,732

Total current liabilities

1,500,724

1,729,600

 
Long-term debt

1,243,814

945,257

Other long-term liabilities

346,007

256,233

Deferred income taxes

835,905

745,442

Stockholders' equity

3,505,109

3,117,816

$

7,431,559

$

6,794,348

 
Supplemental Data
(unaudited)
 

September 30, 2022

December 31, 2021

 
Actual shares outstanding at end of period (000)

103,537

105,094

 
Book value per actual share outstanding at end of period $

33.85

$

29.67

 
 
 
Nine Months Ended September 30

2022

2021

 
Net cash provided by operating activities (000) $

1,355,406

$

969,849

 
Net capital expenditures (000) $

1,018,028

$

511,075

 

 

Contacts

Brad Delco

Senior Vice President – Finance

(479) 820-2723

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