J.B. Hunt Earnings: Intermodal Still Navigating Intense Trucking Sector Competition

Narrow-moat J.B. Hunt’s first-quarter consolidated top line fell 7% year over year (excluding fuel) and missed our expected run rate, particularly for the intermodal and the truck brokerage divisions. We figured revenue would decline again this quarter, given the lingering weakness in overall freight demand and pricing, including abundant market capacity. Still, for intermodal at least, we expected modest gains in truck-to-rail conversion activity thanks in part to rail service gains, and early signs of improvement in retailer inventory restocking, which would benefit overall demand. However, it sounds like competition from the truckload sector remained intense in many corridors, especially in the Eastern US.