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

April 29, 2011 | About:
10qk

10qk

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J.B. Hunt Transport Services Inc. (JBHT) filed Quarterly Report for the period ended 2011-03-31.

J.b. Hunt Transport Services Inc. has a market cap of $5.83 billion; its shares were traded at around $48.08 with a P/E ratio of 28.8 and P/S ratio of 1.5. The dividend yield of J.b. Hunt Transport Services Inc. stocks is 1.1%. J.b. Hunt Transport Services Inc. had an annual average earning growth of 13.2% over the past 10 years. GuruFocus rated J.b. Hunt Transport Services Inc. the business predictability rank of 3-star.

Highlight of Business Operations:

JBI segment revenue increased 23%, to $577 million during the first quarter 2011, compared with $469 million in 2010. This increase in segment revenue was primarily a result of a 15% increase in load volume over the prior year. Load volume in our eastern network increased 28% over the prior year. Additionally, transcontinental growth has maintained a steady 10% growth pace. Pricing results for the current quarter reflected a 4% increase in base price over the prior year. Operating income of the JBI segment increased to $62.6 million in the first quarter 2011, from $47.5 million in 2010, primarily due to the volume and revenue growth. In addition, dray operations showed improvement in productivity and safety, which helped increase operating income.

DCS segment revenue increased 15%, to $238 million in the first quarter 2011, from $208 million in 2010. Excluding fuel surcharges, revenue increased 10%, compared to the first quarter 2010. This increase was primarily attributable to new contracts and growth in existing accounts as well as a slight increase in productivity. Operating income of our DCS segment increased to $18.6 million in 2011, from $18.4 million in 2010. This increase in operating income was primarily due to the increased demand and new business, partially offset by a customer bankruptcy.

JBT segment revenue totaled $119 million for the first quarter 2011, an increase of 6% from $113 million in the first quarter 2010. Excluding FSC, segment revenue increased 1.2%. This increase in revenue was primarily a result of increased rates per loaded mile and longer length of haul. Our JBT segment operating income increased to $5.8 million in 2011, compared with $0.6 million during first quarter 2010. This increase in operating income was partly the result of increased industry demand, offset by higher fuel prices.

ICS segment revenue grew 22%, to $75 million in the first quarter 2011, from $61 million in 2010, which was primarily attributable to an 11% increase in load volume and a change in freight mix to more transactional shipments, which allowed faster pricing adjustments in response to market fluctuations. Operating income of our ICS segment increased to $2.6 million, from $1.1 million in 2010, due to increases in load volume and higher priced business. ICS gross profit (gross revenue less purchased transportation expense) increased 22% to $11 million. Gross profit margin declined slightly to 14.7% in the current quarter from 14.8% in the first quarter 2010 due to increased rates paid to carriers from tighter supply and increased fuel costs. Our ICS carrier base increased 14% and our end of period employee count remained relatively flat compared to first quarter 2010.

Net cash provided by operating activities totaled $137 million during the first three months of 2011, compared with $87 million for the same period 2010. Operating cash flows increased primarily due to increased earnings and a decrease in cash flows related to payroll accruals, due to timing of payments. This increase was offset by an increase in cash flows related to trade accounts payable and income tax payable, due to timing of payments. Net cash used in investing activities totaled $112 million in 2011, compared with $48 million in 2010. The increase related to current year equipment additions associated with growth in the JBI container and chassis fleet as well as truck and tractor trades. Net cash used in financing activities decreased to $26 million in 2011, compared to $39 million in 2010, primarily as a result of lower payments on outstanding debt during the current quarter, offset by our purchase of treasury stock.

Our net capital expenditures were approximately $112 million during the first three months of 2011, compared with $48 million for the same period 2010. Our net capital expenditures include net additions to revenue equipment and non-revenue producing assets, including those recorded in “Other Assets” in our Condensed Consolidated Balance Sheets that are necessary to contribute to and support the future growth of our various business segments. Capital expenditures in 2011 were primarily for tractors, additional intermodal containers and chassis, and other trailing equipment. We are currently committed to spend approximately $300 million during the remainder of 2011, net of $24 million of expected sales proceeds from equipment dispositions. We expect to spend in the range of $410 million and $440 million for net capital expenditures during calendar year 2011. The table above excludes $20.7 million of potential liabilities for uncertain tax positions which are recorded on our Condensed Consolidated Balance Sheets. However, we are unable to reasonably estimate the ultimate timing of any settlements. Operating leases, related to facility lease obligations, were our only off-balance sheet arrangements as of March 31, 2011.

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