JB Hunt Transport Services Inc JBHT

J.B. Hunt Earnings: Depressed Truckload Sector Rates Keeping Intermodal Off Track

Narrow-moat J.B. Hunt’s second-quarter top line fell 6% year over year (excluding fuel), missing our expected run rate, particularly for the flagship intermodal division. Domestic intermodal load volume and pricing were weaker than we expected on persistent competition from depressed truckload-sector rates, especially in Eastern corridors where volume deteriorated by 7%. This overshadowed an apparent uptick in retailer inventory restocking and solid West Coast import gains. In short, truckload industry pricing has remained depressed longer than we initially thought.