J.B. Hunt Transport Services Inc. Reports Operating Results (10-Q)
J.b. Hunt Transport Services Inc. has a market cap of $4.53 billion; its shares were traded at around $35.57 with a P/E ratio of 27 and P/S ratio of 1.4. The dividend yield of J.b. Hunt Transport Services Inc. stocks is 1.3%. J.b. Hunt Transport Services Inc. had an annual average earning growth of 14.9% over the past 10 years. GuruFocus rated J.b. Hunt Transport Services Inc. the business predictability rank of 3-star.JBHT is in the portfolios of Richard Aster Jr of Meridian Fund, Columbia Wanger of Columbia Wanger Asset Management, Manning & Napier Advisors, Inc, Pioneer Investments, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Chuck Royce of Royce& Associates.
Highlight of Business Operations:JBI segment revenue increased 24%, to $526 million during the second quarter 2010, compared with $425 million in 2009. JBI revenue increased 15% over the comparable prior year quarter when the impact of fuel surcharges is excluded. The increase in segment revenue was primarily due to a 19% increase in load volume Operating income of the JBI segment increased to $59.5 million in the second quarter 2010, from $38.8 million in 2009, primarily due to the volume and revenue growth and improved container utilization.
DCS segment revenue increased 31%, to $229 million in 2010, from $174 million in 2009. Excluding fuel surcharges, revenue increased 27% compared to the second quarter 2009, primarily due to increased revenue per truck per week and increased truck count. The increase in truck count related to the final implementation of the delivery network, truck additions at certain accounts that had truck reductions in 2009 and the addition of several new dedicated delivery and non-delivery contracts through the first half of 2010. Operating income of our DCS segment increased to $22.3 million in 2010, from $8.1 million in 2009. The increase in operating income was primarily due to increased demand and focus on more profitable services.
ICS segment revenue grew 3%, to $70 million in the second quarter 2010, from $68 million in the second quarter 2009, which was primarily attributable to a change in freight mix to more transactional shipments. Transactional shipment business allows faster pricing adjustments in response to market fluctuations than contractual shipments. Operating income of our ICS segment decreased to $2.2 million, from $4.2 million in 2009 primarily due to increased purchased transportation expenses, causing significant margin compression on our contractual shipment business, and costs associated with new branch locations. The oversupply of carrier capacity that we experienced during the second quarter 2009 resulted in unusually high margins. As a result, gross profit (gross revenue less purchased transportation expense) decreased 27% to $9.7 million and gross profit margin decreased to 13.9% in the current quarter vs. 19.5% in the second quarter 2009.
JBI segment revenue increased 22%, to $994 million during the first six months 2010, compared with $816 million in 2009. This increase in revenue was primarily a result of increased load volume. Excluding fuel surcharge, revenues increased 14% over the comparable prior year period. Operating income of the JBI segment increased to $107.0 million in the first six months 2010, from $80.1 million in 2009, primarily due to the volume and revenue growth, as well as improved container utilization.
DCS segment revenue increased 23%, to $437 million in 2010, from $354 million in 2009. This revenue increase related to new final-mile delivery contracts added in 2009, as well as increases in productivity. Operating income of our DCS segment increased to $40.7 million in 2010, from $25.4 million in 2009. The increase in operating income was primarily due to increased demand and new business, partially offset by implementation expenses associated with new business.
ICS segment revenue grew 5%, to $131 million in 2010, from $125 million in 2009, despite a 5% decrease in loads. The increase was primarily attributable to a change in shipment mix from contractual to more transactional, which allowed for faster pricing adjustments consistent with market changes. Operating income of our ICS segment decreased to $3.3 million, from $8.3 million in 2009, due to tight capacity, which lowered net margin. Our ICS employee count remained consistent during the first six months 2010, compared with 2009.
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