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J.B. Hunt’s Truckload segment 4Q14 financial performance

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Introduction to segments business

J.B. Hunt Transportation’s (JHBT) Truckload segment offers full-load, dry-van freight, utilizing tractors operating over roads and highways. The company typically picks up freight at the dock or the shipper’s specified location and transports the load directly to the consignee’s location.

To learn more about this segment, read Why J.B. Hunt’s Full-Load, Dry-Van segment is important.

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Financial performance of J.B. Hunt

J.B. Hunt’s Truckload segment has experienced a slowdown since the recession, and the segment fell by $5 million for the full year 2014. However, 4Q14 revenues grew 6% year-over-year (or YoY) to $96 million, driven by a 2% growth in the fleet size from 1,886 tractors at the end of this quarter compared to 1,857 a year ago. If we exclude the fuel surcharges, the revenues grew a strong 10% YoY, driven by increased asset utilization, intentional freight mix change, and core customer rate increases.

J.B. Hunt’s operating income also grew to a strong $8.1 million, beating the $1 million loss in the same quarter last year. This growth was driven by favorable changes from increased rates per loaded mile, rapidly declining fuel prices, and higher utilization of company-owned assets. It was offset by increased driver and independent contract costs per mile, increased hiring costs, and higher safety and insurance costs as compared to the same quarter last year.

Operational factors

For J.B. Hunt, the average length of haul, loads, revenue per tractor, and the average non-paid empty miles per road increased for the quarter compared to the same period last year. However on a fiscal year basis, the average length of haul and loads saw a decline, while the revenue per tractor and the average non-paid empty miles per road saw a rise in their values.

It was a mixed year for J.B. Hunt Transportation’s truck segment. Its major competitors in the US are YRC Worldwide (YRCW), Swift Transportation (SWFT), and Werner Enterprises (WERN). These companies are a part of the iShares Transportation Average ETF (IYT).

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