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

April 29, 2010 | About:
10qk

10qk

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J.B. Hunt Transport Services Inc. (JBHT) filed Quarterly Report for the period ended 2010-03-31.

J.b. Hunt Transport Services Inc. has a market cap of $4.69 billion; its shares were traded at around $36.85 with a P/E ratio of 32 and P/S ratio of 1.5. 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, Manning & Napier Advisors, Inc, Steven Cohen of SAC Capital Advisors, RS Investment Management, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

JBI segment revenue increased 20%, to $469 million during the first quarter 2010, compared with $391 million in 2009. This increase in segment revenue was primarily a result of a 21% increase in load volume over the prior year period. Load volume in our eastern network increased 26% over the prior year. Additionally, transcontinental volume increased 20%. Operating income of the JBI segment increased to $47.5 million in the first quarter 2010, from $41.3 million in 2009, primarily due to the volume and revenue growth.

DCS segment revenue increased 16%, to $208 million in the first quarter 2010, from $179 million in 2009. Excluding fuel surcharges, revenue increased 13%, compared to the first quarter 2009. This revenue increase related to new final-mile delivery contracts added in 2009, as well as an increase in productivity, defined as revenue per truck excluding FSC, at our base business accounts. Operating income of our DCS segment increased to $18.4 million in 2010, from $17.4 million in 2009. This increase in operating income was primarily due to increased demand and new business, partially offset by implementation expenses associated with new business.

JBT segment revenue totaled $113 million for the first quarter 2010, an increase of 11% from $102 million in the first quarter 2009. Excluding FSC, segment revenue increased 4%. This increase in revenue was primarily a result of increased load volume, compared to the same quarter a year ago, which allowed selectivity among available loads. In addition, higher spot rates and longer length of haul contributed to the revenue increase. Our JBT segment operating income was approximately $0.6 million during the first quarter 2010, compared with an operating loss of $5.8 million during first quarter 2009. This increase in operating income was the result of increased revenue and the impact of our network refinement and fleet reduction which allowed for effective cost control measures and better tractor utilization.

ICS segment revenue grew 8%, to $61 million in the first quarter 2010, from $56 million in 2009, which was primarily attributable to a 5% increase in load volume and a change in freight mix to more transactional shipments, which allows faster pricing adjustments in response to market fluctuations. Operating income of our ICS segment decreased to $1.1 million, from $4.1 million in 2009, due to an increase in purchased transportation expense, as well as an increase in costs related to new branch openings. ICS gross profit (gross revenue less purchased transportation expense) decreased 28% to $9.1 million, resulting in a gross profit margin decline to 14.8% in the current quarter from 22.2% in the first quarter 2009. The higher margins in the first quarter 2009 were partly attributable to the oversupply of carrier capacity, which resulted in lower third party charges. During the first quarter 2010, supply moderated creating the need to balance between our long-term growth objectives and procuring capacity that met our service and margin requirements. Our ICS employee count increased 7% during the first quarter 2010, compared with 2009, which was largely in sales and operations.

Net cash provided by operating activities totaled $87 million during the first three months of 2010, compared with $73 million for the same period 2009. Operating cash flows increased primarily due to increased earnings and a decrease in cash flows related to trade accounts payable, due to timing of payments. In addition, the timing of payments related to payroll accruals resulted in a net increase in cash flows from operations for the current quarter. These increases were offset by a decrease in cash flows related to trade receivables, due to timing of receipts, and a decrease in cash provided from other assets, which was primarily due to timing of funding our prepaid insurance. Net cash used in investing activities totaled $48 million in 2010, compared with $53 million in 2009. The decrease in investing cash flows primarily related to lower implementation costs and investment in new DCS start-up business compared with 2009. This decrease was partially offset by an increase in current year equipment additions related to growth in the JBI container and chassis fleet. Net cash used in financing activities increased to $39 million in 2010, compared to $19 million in 2009, as a result of higher payments on outstanding debt during the current quarter and an increase in our quarterly dividend payment.

Our net capital expenditures were approximately $48 million during the first three months of 2010, compared with $54 million for the same period 2009. 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 2010 were primarily for tractor trades, additional intermodal containers and chassis, and other trailing equipment. We are currently committed to spend approximately $142 million during the remainder of 2010, net of $15 million of expected sales proceeds from equipment dispositions. We expect to spend approximately $230 million for net capital expenditures during calendar year 2010. The table above excludes $22.2 million of potential liabilities for uncertain tax positions, as we are unable to reasonably estimate the ultimate timing of settlement.

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