J.B. Hunt Transport Services Inc. Reports Operating Results (10-Q)
J.b. Hunt Transport Services Inc. has a market cap of $5.22 billion; its shares were traded at around $43.42 with a P/E ratio of 22.1 and P/S ratio of 1.5. The dividend yield of J.b. Hunt Transport Services Inc. stocks is 1.2%. 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:JBT segment revenue totaled $376 million for the first nine months 2011, an increase of 4% from $361 million in the same period in 2010. Excluding fuel surcharges, segment revenue decreased 2% on a 7% reduction in tractors year-over-year. Our JBT segment operating income was $19.6 million during the first nine months 2011, compared to $14.3 million in 2010. The increase in operating income was primarily the result of higher pricing as well as gains on equipment trades, resulting from our efforts in network refinement and fleet reduction. This continued focus on network refinement has allowed for effective cost control measures and better tractor utilization, the benefits of which were partially offset by higher fuel costs, net of fuel surcharges, and increases in driver compensation during the first nine months of 2011.
Our net capital expenditures were approximately $324 million during the first nine months of 2011, compared with $145 million for the same period 2010. Our net capital expenditures include net additions to revenue equipment and non-revenue producing assets 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 $130 million during the remainder of 2011, net of $8 million of expected sales proceeds from equipment dispositions. We expect to spend in the range of $440 million and $470 million for net capital expenditures during calendar year 2011. The table above excludes $21.7 million of potential liabilities for uncertain tax positions, as 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 September 30, 2011.
JBI segment revenue increased 24%, to $691 million during the third quarter 2011, compared with $559 million in 2010. The increase in segment revenue was primarily due to a 15% increase in load volume, fuel surcharge increases, and a 4% increase in pricing, excluding fuel surcharges, over the prior year quarter. Load volume in our eastern network increased 31% over the prior year, and our transcontinental loads grew by 8%. Operating income of the JBI segment increased to $78.4 million in the third quarter 2011, from $60.3 million in 2010, primarily due to the volume growth and price increases. A reduction in the number of empty repositioning moves, compared to the third quarter 2010, resulting from a later start to peak shipping season in 2011 and additional container capacity also contributed to the improvement in operating income.
ICS segment revenue grew 24%, to $257 million in 2011, from $208 million in 2010. The increase was attributable to a 12% increase in load volume, higher customer pricing and an increase in the price of fuel. Operating income of our ICS segment increased to $9.0 million, from $6.0 million in 2010, primarily due to increased revenues, lower overhead costs, and operating leverage gained from a more experienced workforce. Gross profit margin declined to 13.4% for the first nine months 2011 from 14.3% for the comparable period 2010 due to increased rates paid to carriers resulting from tighter supply and increased fuel costs. Our period end third-party carrier base increased 13%, and our ICS employee count increased 12% when compared to September 30, 2010.
JBT segment revenue totaled $127 million for the third quarter 2011, an increase of 2% from the $124 million in the third quarter 2010. Excluding fuel surcharges, segment revenue decreased 5%, on a 7% reduction in tractors year-over-year. Utilization, which is defined as miles per truck per work day, increased 1% and rates per mile, excluding fuel surcharges, increased 2.4%, compared to third quarter 2010. Rates from consistent shippers improved year-over-year by 3%. Our JBT segment operating income was $6.8 million, compared to $6.5 million in the third quarter 2010. This increase in operating income was primarily due to improvements in safety and accident costs and gains on equipment trades, partly offset by increases in driver wages and higher fuel costs, net of fuel surcharges.
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