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J.B. Hunt Transport Services Inc. Reports Operating Results (10-Q)

October 29, 2010 | About:
10qk

10qk

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J.B. Hunt Transport Services Inc. (JBHT) filed Quarterly Report for the period ended 2010-09-30.

J.b. Hunt Transport Services Inc. has a market cap of $4.39 billion; its shares were traded at around $35.97 with a P/E ratio of 25.1 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, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

JBI segment revenue increased 23%, to $559 million during the third quarter 2010, compared with $456 million in 2009. JBI revenue increased 19% over the comparable prior year quarter when the impact of fuel surcharges is excluded. The increase in segment revenue was primarily due to a 17% increase in load volume. Demand was generally strong across the country as our eastern network grew 26% and transcontinental business grew 13% over the same period of 2009. Operating income of the JBI segment increased to $60.3 million in the third quarter 2010, from $49.6 million in 2009, primarily due to the volume and revenue growth and improved equipment utilization.

DCS segment revenue increased 18%, to $232 million in 2010, from $197 million in 2009. Excluding fuel surcharges, revenue increased 16% compared to the third quarter 2009, primarily due to increased revenue per truck per week and increased truck count. These increases were primarily the result of 66% higher revenues in our delivery channel and 13% revenue growth in our replenishment channel plus the addition of several new contracts throughout 2010, as well as truck additions in certain existing accounts. Operating income of our DCS segment increased to $22.1 million in 2010, from $18.9 million in 2009. The increase in operating income was primarily due to increased demand and focus on more profitable services.

ICS segment revenue grew 14%, to $77 million in the third quarter 2010, from $68 million in the third quarter 2009. Operating income of our ICS segment decreased to $2.7 million, from $3.0 million in 2009 primarily due to increased purchased transportation expenses, causing significant margin compression, and costs associated with new branch locations. Tighter market balance of supply and demand for transportation services resulted in lower margins for the third quarter 2010 compared with 2009. As a result, gross profit (gross revenue less purchased transportation expense) decreased 2% to $10.9 million and gross profit margin decreased to 14.3% in the current quarter vs. 16.5% in the third quarter 2009.

JBI segment revenue increased 22%, to $1.55 billion during the first nine months 2010, compared with $1.27 billion in 2009. This increase in revenue was primarily a result of increased load volume. Excluding fuel surcharge, revenues increased 16% over the comparable prior year period. Operating income of the JBI segment increased to $167.3 million in the first nine months 2010, from $129.7 million in 2009, primarily due to the volume and revenue growth, as well as improved container utilization.

DCS segment revenue increased 22%, to $669 million in 2010, from $550 million in 2009. This revenue increase is primarily related to new delivery channel contracts added in 2009 and early 2010, as well as increases in productivity. Operating income of our DCS segment increased to $62.8 million in 2010, from $44.3 million in 2009. The increase in operating income was primarily due to increased demand and new business, partially offset by implementation expenses associated with this new business.

ICS segment revenue grew 8%, to $208 million in 2010, from $192 million in 2009, despite a 6% 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 $6.0 million, from $11.4 million in 2009, due to tight capacity, which lowered net margin. Our ICS employee count increased 9% during the first nine months 2010, compared with 2009.

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