J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) reported U.S. GAAP net earnings of $152.1 million for the third quarter of 2024, with diluted earnings per share (EPS) of $1.49. This represents a decline from the $187.4 million in net earnings, or $1.80 per diluted share, reported for the same period in 2023.
The company’s total operating revenue for the quarter reached $3.07 billion, down 3% from $3.16 billion in the third quarter of 2023. The revenue drop was mainly due to a 5% decrease in gross revenue per load in the Intermodal (JBI) segment and a 6% drop in the Truckload (JBT) segment. Additionally, load volumes fell by 10% in Integrated Capacity Solutions (ICS) and 6% in Dedicated Contract Services® (DCS®), while Final Mile Services® (FMS) saw 6% fewer stops. However, the decline was somewhat offset by a 5% growth in JBI loads, particularly in both transcontinental and eastern networks, and a 3% increase in ICS revenue per load. Excluding fuel surcharge revenue, total operating revenue for the quarter was down less than 1% compared to the same quarter in 2023.
Operating income for the third quarter dropped 7% to $224.1 million, down from $241.7 million a year earlier. This decrease was primarily driven by lower revenue in segments other than JBI, along with increased expenses related to personnel, insurance, claims, and equipment. On a consolidated basis, operating income as a percentage of gross revenue fell year-over-year, impacted by these higher costs, though partially offset by lower rail and truck purchased transportation expenses.
Net interest expense for the quarter rose due to higher interest rates and a tax-related interest benefit in the prior year.
The effective income tax rate for the third quarter of 2024 was 25.2%, compared to 18.2% in 2023, with the increase mainly due to a discrete tax benefit recorded in the previous year’s quarter. The company expects its full-year 2024 tax rate to be approximately 24.5%.
Segment Information: Intermodal (JBI)
- Third Quarter 2024 Revenue: $1.56 billion (flat year-over-year)
- Third Quarter 2024 Operating Income: $111.8 million (down 13%)
Intermodal volume increased by 5% compared to the same period in 2023. Loads in the transcontinental network grew by 7%, while the eastern network saw a 3% increase. Demand for intermodal services improved throughout the quarter, driven by seasonal factors and strong rail performance across both the transcontinental and eastern networks. Eastbound transcontinental loads out of Southern California saw particularly strong demand, growing by double digits year-over-year.
While segment revenue remained flat from the prior year, this reflected the combined effect of a 5% volume increase offset by a 5% decline in gross revenue per load. This decrease in revenue per load was due to changes in customer rates, fuel surcharge revenue, and freight mix. Excluding fuel surcharge revenue, revenue per load fell by 2% year-over-year.
Operating income for the segment dropped 13%, primarily due to lower yields, partially offset by higher volume absorbing some network and equipment costs. Elevated network imbalance and repositioning costs, as well as increased driver hiring expenses to meet peak-season demand, also impacted results. The operating income margin as a percentage of gross revenue declined, driven by higher wages and benefits for both drivers and non-drivers, increased insurance and claims expenses, and higher equipment-related and maintenance costs.
During the quarter, the company added 308 new pieces of trailing equipment, ending the period with approximately 121,500 containers and 6,500 power units in the dray fleet.