Following a promising Q4, J.B. Hunt Transport (JBHT, Financial) experienced a stagnation in intermodal volume year-over-year in Q1, marking a significant slowdown from the previous quarter's 6% increase. This period also saw the company missing earnings and sales forecasts, continuing a trend of underwhelming quarterly performances. Despite a 16% drop from its 52-week highs in February, JBHT's Q1 results failed to spark a recovery, with shares continuing to slide.
During the Q1 earnings call, outgoing CEO John Roberts III acknowledged the prolonged challenges in the current market. The company reported a 35% year-over-year decrease in EPS to $1.22 and a 9% drop in revenue to $2.94 billion, underscoring a consistent shortfall in expectations. Specifically, JBHT's intermodal segment, its largest, saw a 9% decline in sales on flat volume, with mixed results across its network due to lower demand and increased competition from trucking.
- Intermodal faced a 9% sales drop in Q1, with transcontinental loads up by 5% but eastern network loads down by 7%.
- JBHT's Dedicated Contract Services (DCS) saw a slight 2% decrease in revenue, indicating some stabilization.
- The Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT) segments had varied outcomes, with FMS being the only segment to report growth.
The company's cautious outlook in January, due to economic uncertainties, seems justified as Q1 results reflect the rapidly changing economic conditions. However, there's a silver lining with the expected normalization of intermodal pricing and the stabilization in the DCS segment. With Shelley Simpson set to become CEO in July, JBHT remains a company to watch, particularly at its current valuation.
