J.B. Hunt Transport Services (JBHT) is set to report its Q3 2024 earnings on October 15 after the market close, with analysts expecting EPS of $1.39 and revenue of $3.00 billion, according to FactSet consensus estimates. The company has faced headwinds throughout the year due to excess costs and capacity, with its intermodal segment under pressure from weak pricing and demand softness. However, a surge in import volumes on the West Coast has provided some optimism, and analysts are watching for signs of improvement in intermodal volumes, which could benefit from the company’s strong partnership with BNSF.
Shares of JBHT rallied from $162 to $178 over the past week. The stock ran aggressively into the 200-day MA ($178) but has pulled back ahead of today's report as investors are concerned JBHT could, once again, fall short of expectations.
Analysts are concerned that the quarter will continue to reflect the challenging environment, with price pressures in intermodal, margin pressure in Dedicated Contract Services, and weakness in other parts of the country weighing on performance. However, some analysts believe that JBHT may begin to benefit from early peak season shipping and surcharges related to moving equipment, which could help offset some of the volume and pricing challenges. Overall, the expectation is for another weak quarter, but any positive signs of recovery could provide a boost to investor sentiment.
One of the key factors investors will be watching is JBHT's intermodal business, particularly in light of the company’s comments about a pickup in West Coast volumes. The ability to convert more freight from over-the-road (OTR) to intermodal remains a long-term opportunity, especially if truckload (TL) prices improve. JBHT's exclusive relationship with BNSF gives it a competitive advantage in this space, and analysts believe the company is well-positioned to capitalize on any upturn in intermodal demand, even if the near-term environment remains difficult.
Overall, while the near-term outlook is clouded by market challenges, some analysts maintain a positive long-term view on JBHT due to its strategic advantages in intermodal and dedicated trucking. The company’s ability to manage through cyclical downturns, combined with its strong relationships and marketing efforts, is expected to help drive growth in the future. Investors will be closely watching the company’s commentary on market conditions, pricing pressures, and cost management during the Q3 earnings call.
J.B. Hunt Transport reported another disappointing quarter in Q2, missing on both earnings and revenue estimates, with adjusted EPS of $1.32 falling short of the $1.48 consensus. Revenue also declined by 6.5% year-over-year to $2.93 billion, driven by weak demand, especially in the intermodal and truckload segments, where volume declines of 1% and double-digit sales drops significantly weighed on performance. While some signs of recovery appeared in the seasonal pattern of the business, competition and overcapacity in the trucking industry remained key challenges, exacerbating pricing pressures.
Analysts were particularly concerned about the continued weakness in key segments such as Intermodal, which saw revenues fall 5% year-over-year to $1.41 billion, with volume declines most severe on the East Coast. JBHT's other divisions, including Truckload and Integrated Capacity Solutions, also posted double-digit revenue declines, adding to the company’s woes. However, JBHT management expressed confidence that demand for intermodal will improve over time, as it offers both economic and environmental advantages, despite near-term hurdles.
On the positive side, the company noted that demand patterns had normalized compared to pre-pandemic seasons, with an uplift in volumes in June. However, this was not enough to counter the broader challenges facing the company, particularly weak demand and competitive pressures. Analysts have grown cautious about JBHT's ability to turn the corner in the near term, although some see potential for recovery in 2025 as the market stabilizes and margin pressures ease.