Analyst Note| Matthew Young, CFA |
Trucking and logistics giant J.B. Hunt posted a 15% jump in first-quarter revenue, ahead of our expected run rate as higher than anticipated rate gains for truck brokerage (ICS) and for-hire truckload (JBT) comfortably offset sluggish intermodal volumes. Container volume (down 3%) once again missed our forecast due to rail network congestion linked to the interplay of robust demand, equipment imbalances, and constrained driver supply for drayage, and winter storms made matters worse. That said, intermodal demand is otherwise quite strong thanks to tight truckload capacity and heavy retailer restocking, and volumes rose 4% year over year in March as rail congestion is slowly recovering. Those same factors are providing significant demand and pricing tailwinds for the other divisions as well, and JBT’s “360box” trailer-capacity offering is gaining lots of traction.