J.B. Hunt reports Q1 Miss, sees freight recession

By Davit Kirakosyan

J.B. Hunt Transport Services Inc (NASDAQ:) reported its Q1 earnings results yesterday, with EPS of $1.89 coming in worse than the consensus estimate of $2.04.

7% year-over-year to $3.23 billion, missing the consensus estimate of $3.43B, primarily driven by declines in volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT).

Total freight transactions in the Marketplace for J.B. Hunt 360° fell 38% year-over-year to $370 million.

President Shelley Simpson stated that the freight industry is currently facing deflationary price pressure and inflationary cost pressures, creating a challenging environment. Despite this, Simpson evaluated the carriers’ performance in the current situation and believes that it would be extremely tough for spot pricing to decrease significantly.

“I’m not suggesting we’ve completely found bottom, but we have seen a more leveling out,” Simpson added.

Following the earnings report, several Wall Street analysts lowered their price targets on the company, including Stifel with a new target of $162.00 (from $169.00), TD Cowen with a new target of $185.00 (from $193.00), BofA Securities with a new target of $194.00 (from $197.00), and Raymond James with a new target of $195.00 (from $200.00).