J.B. Hunt beats lowered Q3 expectations, but extra costs top $50 million on diesel, drivers and claims

J.B. Hunt Transport Services posted third-quarter results slightly ahead of lowered analyst expectations on Thursday, after warning in September that diesel, driver and claims costs would weigh on the quarter, according to FreightWaves on Oct. 15.

The carrier reported revenue of $3.68 billion, ahead of a $3.59 billion consensus estimate, and earnings per share of $1.82, one cent above revised expectations. A higher tax rate was a $0.04 per-share headwind, partly offset by lower net interest expense. The result was also slightly better than the company's September guidance, which implied earnings of about $1.77 at the midpoint.

The cost picture was worse than warned. In September the company had flagged about $10 million from diesel prices, $25 million in driver-related costs and $10 million in elevated cargo claims. FreightWaves reported the actual impact in the quarter was over $50 million.

Intermodal remained the engine. Its revenue increased 20% year over year to $1.83 billion, with loads up 8% and revenue per load up 11%, helped by higher fuel prices; excluding fuel, revenue per load was up 2%. Volumes rose 18% in the East and 1% on transcontinental lanes. The dedicated unit's operating ratio deteriorated to 91.5%, while the brokerage unit booked a second straight operating profit after 13 quarters in the red, and the asset-light truckload unit swung to a $7 million operating profit.

FreightWaves noted the quarter was the fifth straight with year-over-year improvement in operating income and earnings per share. Shares were down 2.4% in after-hours trading on Thursday.