J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT), a prominent name in the transportation and logistics sector, has released its financial results for the fourth quarter of 2024. The company reported U.S. GAAP (United States Generally Accepted Accounting Principles) net income of $155.5 million, or diluted earnings per share of $1.53. This marks a slight increase from the $153.5 million in net earnings, or diluted earnings per share of $1.47, recorded in the fourth quarter of J.B. Hunt 2023.
Revenue Analysis
J.B. Hunt The total operating revenue for the fourth quarter of 2024 stood at $3.15 billion, reflecting a 5% decrease from the $3.30 billion reported during the same period in 2023. Excluding fuel surcharge revenue, the decline in total operating revenue was 2% compared to the previous year’s quarter. This reduction was primarily attributed to a combination of factors affecting various segments of the business:
- Intermodal (JBI): J.B. Hunt Revenue per load, excluding fuel surcharge revenue, decreased by 3%.
- Truckload (JBT): J.B. Hunt Revenue per load, excluding fuel surcharge revenue, declined by 2%.
- Dedicated Contract Services® (DCS®):J.B. Hunt The average number of trucks fell by 4%.
- Integrated Capacity Solutions (ICS): J.B. HuntLoad volume experienced a significant 22% decline.
Despite these challenges, certain positive trends helped offset the revenue decline. Intermodal volumes rose by 5%, DCS productivity (measured as revenue per truck per week, excluding fuel surcharge revenue) increased by 2%, and gross revenue per load in ICS improved by 9%.
Operating Income
J.B. Hunt Operating income for the fourth quarter of 2024 saw a modest increase of 2%, reaching $207.0 million compared to $203.3 million in the fourth quarter of 2023. J.B. Hunt This growth occurred despite the impact of pre-tax charges. Specifically, the current quarter’s operating income was negatively affected by $16.0 million in intangible asset impairments, whereas the prior year’s quarter included a $53.4 million charge related to insurance items.
After accounting for these charges, operating income experienced a year-over-year decline. The primary contributors to this decrease included:
- Yield pressure within the Intermodal (JBI) segment.
- A reduced average truck count in the DCS segment.
- Increased consolidated equipment and insurance-related costs.
Nonetheless, on a GAAP consolidated basis, operating income as a percentage of consolidated gross revenue increased year-over-year. This improvement was driven by lower rail and truck purchased transportation costs and reduced insurance-related expenses. These gains were partially offset by higher costs associated with professional driver and non-driver wages and benefits, as well as equipment-related expenses as a percentage of gross revenue.
Net Interest Expense and Tax Rates
Net interest expense for the fourth quarter of 2024 decreased due to a lower average outstanding debt balance compared to the same period in 2023. The company’s effective tax rate for the fourth quarter of 2024 was 19.0%, slightly higher than the 17.9% reported in the fourth quarter of 2023. On an annual basis, the effective tax rates for 2024 and 2023 were 24.8% and 22.1%, respectively.
Looking ahead, J.B. Hunt expects its annual effective tax rate for 2025 to range between 24.0% and 25.0%, assuming no significant changes in current legislation.
Segment Performance
Intermodal (JBI)
The Intermodal segment faced challenges in the fourth quarter, with a 3% decline in revenue per load (excluding fuel surcharge revenue). However, a 5% increase in volume helped mitigate some of the revenue pressures. The segment continues to navigate a competitive market, focusing on efficiency and customer satisfaction.
Dedicated Contract Services® (DCS®)
In the DCS segment, a 4% reduction in the average truck count contributed to a decline in revenue. Despite this, productivity improved by 2% compared to the prior year. The company remains committed to optimizing its dedicated services by leveraging technology and enhancing operational efficiency.
Truckload (JBT)
The Truckload segment reported a 2% decline in revenue per load, excluding fuel surcharge revenue. This reflects the broader challenges within the trucking industry, including yield pressure and fluctuating demand. J.B. Hunt continues to focus on maximizing load efficiency and maintaining strong relationships with its customers.
Integrated Capacity Solutions (ICS)
The ICS segment experienced the most significant challenges, with a 22% drop in load volume. However, this was partially offset by a 9% increase in gross revenue per load. The company remains focused on enhancing its digital freight matching capabilities and expanding its customer base to drive future growth in this segment.
Segment Information: Fourth Quarter 2024 Performance Overview
Intermodal (JBI)
Revenue: $1.60 billion (down 2%)
Operating Income: $117.0 million (down 10%)
Intermodal volume rose by 5% compared to Q4 2023, with transcontinental network loads increasing by 4% and eastern network loads up by 6%. Sequentially, volumes grew by 2% from Q3 2024, with stronger performance in both networks. Demand was seasonally robust, particularly for eastbound loads originating in Southern California.
Despite the volume growth, revenue declined by 2% due to a 6% decrease in revenue per load. This decrease stemmed from changes in freight mix, customer rates, and lower fuel surcharge revenue, which offset the volume increase. Excluding fuel surcharge revenue, revenue per load fell by 3% year-over-year.
Operating income dropped by 10%, driven primarily by lower yields. Elevated costs for repositioning to address network imbalances, along with higher driver hiring and onboarding expenses, also impacted performance. Wage increases for professional drivers and non-drivers, coupled with higher equipment and maintenance costs, further pressured margins. The prior-year period benefited from a $16.0 million insurance-related pre-tax charge, and additional insurance costs in Q4 2024 further contributed to the decline in operating income and margin percentage.
Dedicated Contract Services (DCS)
Revenue: $839 million (down 5%)
Operating Income: $90.3 million (up 5%)
Revenue decreased by 5%, attributed to a 4% reduction in average truck count and a 1% decline in productivity (revenue per truck per week). Excluding fuel surcharge revenue, productivity improved by 2% year-over-year, supported by contracted index-based price adjustments.
The fleet ended the quarter with 605 fewer revenue-generating trucks compared to Q4 2023, and 114 fewer trucks than Q3 2024. Customer retention remained high at approximately 90%, with fleet downsizing and minor account losses driving the truck count decline.
Operating income rose by 5%, aided by the absence of $20.0 million in insurance-related charges from Q4 2023. Excluding these charges, operating income declined slightly due to reduced revenue and higher remaining insurance-related expenses. Lower bad debt costs, improved utilization of equipment, and productivity gains partially offset these pressures.