J.B. Hunt’s Intemodal Revenue Growth in the Second Quarter



Second-quarter intermodal revenue

J.B. Hunt Transport Services (JBHT) operates in four segments. The Intermodal segment accounts for more than 50% of J.B. Hunt’s total revenues. In the second quarter, the Intermodal segment’s revenues were $1.1 billion—up 16.3% compared to the second quarter of 2017. The segment’s revenues accounted for 54% of the company’s total revenues in the second quarter—down 4% from 58% in the same quarter last year.

Looking at the above chart, J.B. Hunt’s Intermodal segment’s revenue growth rose steadily YoY (year-over-year) from the third quarter of 2016. The segment’s YoY revenue growth was the highest in the second quarter in the last 14 quarters.

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Behind the double-digit revenue rise

J.B. Hunt’s intermodal load volumes expanded 4% in the second quarter from the same period last year. However, transcontinental loads fell ~2% from the second quarter of 2017 due to network congestion and changes in the freight mix away from higher cost dray movements. The volumes over J.B. Hunt’s Eastern network rose 13% YoY in the second quarter.

The revenues increased due to 4% volume growth and an ~12% rise in the revenue per load. The revenue per load grew mainly due to a favorable combination of customer rate changes, fuel surcharges, and freight mix. If we exclude the impact of fuel surcharges on the revenues, the revenue per load grew 8% in the second quarter from the same period in 2017.

Peer group’s intermodal revenue

J.B. Hunt’s Intermodal segment mainly competes with major railroads (XLI) and trucking companies’ intermodal vertical. CSX (CSX) reported its second-quarter earnings on July 17. CSX’s intermodal revenue rose 9% YoY in the second quarter to $490.0 million from $448.0 million a year ago.

Marten Transport’s (MRTN) intermodal revenue grew 33.2% YoY to $25.4 million in the second quarter from $19.1 million. Norfolk Southern (NSC) and Union Pacific (UNP) are scheduled to release their second-quarter earnings on July 19 and July 25, respectively.

Next, we’ll discuss the results for J.B. Hunt’s Dedicated Contract Service segments.


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