J.B. Hunt earned $93.4 million during the second quarter, up nearly $6 million from the same period last year, on fairly robust revenue results for most of its segments.
The company’s largest segment, Intermodal, experienced a revenue rise of 9 percent, year-over-year, to $931 million, on the strength of an 8-percent rise in volumes. The company said Eastern network growth finished the quarter at 17 percent, with transcontinental growth ticking up 2 percent. Revenue-per-load rose by 1 percent, year-over-year.
Operating income only rose by 2 percent, as the business was hampered by slow rail velocity and service disruptions, which meant box-turn results and dray power utilization both fell compared to the second quarter of 2013.
“Increased costs to attract and retain drivers, particularly in high freight density markets, higher insurance and claims costs, increased tire and equipment costs, and increases in outsourced drayage costs compared to prior year partially offset the benefit of increased revenue,” the company said.
Truck revenue fell by a little more than $9 million from 2013 to 2014, a change that basically meant growth remained flat, officials said, but operating income skyrocketed by 217 percent to $9.4 million. The flat revenue growth comes at a time when J.B. Hunt’s fleet size decreased by 8 percent, but rates per loaded mile rose by 10 percent because of an increase in shorter hauls.
As for the segment’s operating gains, the company said: “Favorable changes in core rate, freight mix, lower personnel costs, a smaller trailer fleet, and approximately $2.8 million in equipment sale gains compared to none in second quarter 2013, were partially offset by increased driver and independent contractor costs, increased driver-hiring costs, and higher equipment costs per unit, compared to second quarter 2013.”
Dedicated Contract Services revenue rose 15 percent to $348 million, and integrated capacity solutions saw its revenue rose to $173 million, a 31-percent gain over the second quarter of 2013. While DCS experienced an operating-income rise of 2 percent, ICS’ operating income shot up by 50 percent to $6.2 million. The sharp rise occurred because of revenue gains and a better gross profit margin.
“The slowdown in train velocity and the difficult driver recruiting environment has challenged our growth in JBI. We are pleased we were able to maintain profitability levels despite these obstacles,” J.B. Hunt’s president and chief executive officer, John Roberts, said in a statement. “The worsening driver supply conditions will continue to be a headwind for DCS and JBT as well.”