Hot Stock to watch: J B Hunt Transport Services Inc (NASDAQ: JBHT)

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J B Hunt Transport Services Inc  (NASDAQ: JBHT) stock rose over 0.7% on October 16th, 2019 (as of  9:38 am GMT-4; Source: Google finance) despite mixed results for the third quarter of FY 19 due to continued pressure on the money-losing integrated capacity solutions segment. JBHT’s third-quarter profit rose to $151.2 million up from $131.1 million in the year-ago quarter. At September 30, 2019, JBHT had cash and cash equivalents of approximately $75 million.

JBHT in the third quarter of FY 19 has reported the adjusted earnings per share of $1.40, missing the analysts’ estimates for the adjusted earnings per share of $1.44, according to Analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 35.9 percent to $2.36 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $2.34 billion. The intermodal segment’s revenue rose 1.8% to $1.24 billion in the September quarter, which is slightly below analysts’ forecast, reflecting roughly flat volume compared with the same period a year earlier and about a 2% increase in revenue per load. Operating income for the third quarter 2019 totaled $212.1 million compared to $174.7 million for the third quarter 2018.

Moreover, for the third quarter 2019, the loads per workday for July was 78.51, August was 79.87 and September was 83.42. June loads per work day was 78.17. While the company were encouraged by the increased throughput, the company are still experiencing cost pressures, mainly in rail purchase transportation rates and localized driver inflations, not across the country but definitely in local markets, as well as the additional costs associated with growing the company’s network, which is now more inbound out of balance than it has been in the past.

For Trucks, the same store sales contract rates were positive in the third quarter and year-over-year. However, customer spot activity was less than half of what it was a year ago, which had affected both load counts and overall rate for loaded mile. While the company have seen some seasonality in the market and customers are meeting their truckload contractual commitments, customer spot activity is not expected to rebound substantially in the fourth quarter of 2019. In Dedicated, the new truck additions were lower than recent quarters, but they actually were in line with first and second quarter 2018. But the pipeline as it stands today remains very strong and the company intends to add 800 to 1,000 trucks in 2019.

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