What Affected the 3Q16 Earnings of Major US Truckload Carriers?
3Q16 earnings of major US truckload carriers
In this article, we’ll take a look at the earnings of the major truckload carriers under review in this series. In the peer group, J.B. Hunt Transport Services (JBHT) reported the least damage to its earning per share (or EPS) in 3Q16.
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JBHT reported a 2% fall in its 3Q16 earnings. The company has indulged in stock buybacks in the last few years. Though it saw a 17.3% fall in its interest expenses, a 5.6% fall in its operating income pulled JBHT’s 3Q16 earnings down.
Werner Enterprises’ (WERN) 3Q16 earnings plunged 40.9% in 3Q16. Its fall in EPS was the highest among the truckload companies under discussion. Even though the net effect of WERN’s interest income and expenses was a favorable 23% in 3Q16, its operating income fell 45% in the quarter. Plus, the absence of the company’s repurchase of its common stock in 2016 also negatively impacted its EPS.
Swift Transportation (SWFT) reported the second-highest fall in EPS at 28%. SWFT’s EPS fell to $0.18 per share in 3Q16 from $0.25 per share in 3Q15. Even though the company’s number of shares fell 6.7% in 3Q16 and its interest expenses fell 19%, a significant fall of 47% in its operating income negatively impacted its earnings.
Knight Transportation’s (KNX) 3Q16 EPS fell 21.6% due to a 20.4% fall in its operating income and a slump of 40.5% in its income from investment sales gains.
Heartland Express (HTLD) witnessed a fall of 11.8% in its 3Q16 EPS on account of the absence of a $6.0 million gain on property disposal. Landstar System’s (LSTR) 3Q16 earnings fell 7.2% due to a 10.9% fall in its operating income and a 23% rise in its interest expenses.
Investing in ETFs
The transportation sector may not be lucrative for now, but investors with long-term horizons who are interested in indirect investment in transportation stocks can consider the iShares Transportation Average ETF (IYT). Among major transportation and logistics sector ETFs, IYT invests 11.1% in trucking and 7.4% in shipping companies.
In the next article, we’ll discuss the debt levels of these carriers.