J.B. Hunt Transport Services Inc. Reports Operating Results (10-Q)
J.b. Hunt Transport Services, Inc. has a market cap of $6.74 billion; its shares were traded at around $57.08 with a P/E ratio of 22.9 and P/S ratio of 1.5. The dividend yield of J.b. Hunt Transport Services, Inc. stocks is 1%. J.b. Hunt Transport Services, Inc. had an annual average earning growth of 13% 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 15%, to $794 million during the third quarter 2012, compared with $691 million in 2011. This increase in segment revenue was primarily the result of a 15% increase in load volume. Load volume in our eastern network increased 22% and transcontinental loads grew by 11% over the third quarter 2011. The combination of traffic mix, customer rate increases and changes in fuel surcharges kept the segment's revenue per load flat compared to a year ago. Operating income of the JBI segment increased 25% to $97.9 million in the third quarter 2012, from $78.4 million in 2011, primarily due to steady load growth, improved container utilization and drayage efficiencies. Cost increases in rail purchase transportation and from shortages in the available driver market partially offset the benefits of improved operations.
JBT segment revenue totaled $117 million for the third quarter 2012, a decrease of 8% from $127 million in the third quarter 2011, primarily due to an approximate 9% reduction in tractors year-over-year. Excluding fuel surcharges, segment revenue decreased 7%. Rates per mile, excluding fuel surcharges, increased approximately 6%, due primarily to changes in freight mix, more favorable spot pricing, and temporary customer fleet activity related to one-time weather events. Length of haul declined 9% during the third quarter of 2012 when compared to 2011. Our JBT segment operating income was $4 million, compared to $6.8 million in the third quarter 2011. This 41% decrease in operating income was primarily the result of lower utilization and increases in empty miles, employee health care cost, driver wages and costs to attract independent contractors when compared to third quarter 2011.
JBT segment revenue totaled $371 million for the first nine months 2012, a decrease of approximately 1% from $376 million in the same period in 2011. Excluding fuel surcharges, revenue for the first nine months 2012 decreased 2% compared to the same period 2011, on a 9% reduction in tractors year-over-year. Increases in customer rates and load volume were offset by less paid empty miles and a reduction in average length of haul. Our JBT segment operating income decreased to $17.7 million during the first nine months 2012, from $19.6 million in 2011. This decrease in operating income was primarily due to decreased revenue, increased independent contractor costs and fewer gains on equipment sales, partially offset by overall cost decreases related to the reduction in the segment's tractor fleet.
ICS segment revenue grew 28%, to $328 million in 2012, from $257 million in 2011, primarily due to a 23% increase in loads and higher pricing in our contractual and transactional business. Operating income of our ICS segment increased to $11.5 million, from $9 million in 2011, primarily due to increased revenues. ICS gross profit margin declined to 12.5% for the first nine months 2012 from 13.4% for the comparable period 2011 attributable to increased rates paid to third party carriers, which was the result of a tighter supply of qualified purchased transportation providers. Our ICS 2012 period ending employee count increased 16% compared with 2011, and our third-party carrier base increased 12% over 2011.
Net cash provided by operating activities totaled $417 million during the first nine months of 2012, compared with $488 million for the same period 2011. Operating cash flows decreased primarily due to timing of payments of income taxes and other accrued expenses and the timing of trade receivables collections, offset by increased earnings. Net cash used in investing activities totaled $279 million in 2012, compared with $324 million in 2011. The decrease related to the timing of equipment purchases and sales. Net cash used in financing activities decreased to $138 million in 2012, compared to $164 million in 2011. Financing expenditures consisted primarily of payments on outstanding debt and dividends in 2012, while net financing expenditures in 2011 were primarily for stock repurchases and dividends. Cash paid for income taxes during the current period increased $85.6 million when compared to the first nine months of 2011 due to the effect of timing differences caused by the use of 100% bonus depreciation within the Company's 2011 corporate tax filings.
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