Sign in
HJ

HUNT J B TRANSPORT SERVICES INC (JBHT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $2.92B (-1% y/y), operating income $178.7M (-8% y/y), and diluted EPS $1.17 vs. $1.22 (-4% y/y); effective tax rate fell to 26.5% (25–26% expected for FY25) .
  • Intermodal delivered record first‑quarter volume (+8% y/y) and +5% revenue, but operating income fell 7% on lower yields and cost inflation; DCS revenue fell 4% and operating income fell 14%; ICS loss narrowed to $(2.7)M; JBT operating income rose 66% despite a 7% revenue decline .
  • Versus consensus, JBHT modestly beat revenue ($2.921B vs. $2.902B*) and EPS ($1.17 vs. $1.145*), while EBITDA came in below ($358.2M actual vs. $366.0M*); management emphasized margin repair and disciplined pricing into bid season .
  • FY25 capex guidance was lowered to $500–$700M (from $700–$900M) and share repurchases totaled $234M with $650M authorization remaining; dividend held at $0.44 per share (reconfirmed Apr 24) .

Values marked with * were retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Record Intermodal volumes: “We set a first quarter volume record… Eastern volume grew 13%” (Transcon +4%) .
  • ICS improved profitability: revenue per load +8%, gross margin to 15.3% (from 14.3%); operating loss improved to $(2.7)M from $(17.5)M y/y .
  • JBT operating income +66% on improved safety, network balance, and cost discipline; trailer turns +9% y/y .
  • CEO tone on operational excellence and margin repair: “Beginning to repair our margins… remains a top priority… we will exit from a position of strength” .

What Went Wrong

  • Yield pressure: Intermodal revenue per load down 2% (ex‑fuel down 1%); Intermodal operating income −7% amid higher insurance, medical, and storage costs .
  • Cost inflation: Insurance claims/premiums and group medical expenses rose across segments, pressuring margins despite headcount attrition and cost controls .
  • DCS fleet downsizing: average trucks −5%, revenue −4%, operating income −14%; net −630 trucks y/y with retention ~91% .
  • FMS demand weakness: revenue −12%, operating income −69% y/y (prior period had $3.1M claim benefit) .

Financial Results

Consolidated trend (sequential quarters)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$3.068 $3.146 $2.921
Operating Income ($USD Millions)$224.1 $207.0 $178.7
Operating Margin (%)7.3% 6.6% 6.1%
Net Earnings ($USD Millions)$152.1 $155.5 $117.7
Diluted EPS ($USD)$1.49 $1.53 $1.17

YoY comparison (Q1)

MetricQ1 2024Q1 2025
Revenue ($USD Billions)$2.944 $2.921
Operating Income ($USD Millions)$194.4 $178.7
Net Earnings ($USD Millions)$127.5 $117.7
Diluted EPS ($USD)$1.22 $1.17

Actual vs. Street consensus (Q1 2025)

MetricConsensus*Actual
Revenue ($USD Billions)$2.902*$2.921
Diluted EPS ($USD)$1.145*$1.17
EBITDA ($USD Millions)$366.0*$358.2

Values marked with * were retrieved from S&P Global.

Segment breakdown (Q1)

SegmentRevenue Q1 2024 ($MM)Revenue Q1 2025 ($MM)Operating Income Q1 2024 ($MM)Operating Income Q1 2025 ($MM)
Intermodal (JBI)$1,395.4 $1,469.3 $101.9 $94.4
Dedicated (DCS)$860.0 $822.3 $93.6 $80.3
ICS$285.3 $268.0 $(17.5) $(2.7)
Final Mile (FMS)$229.3 $200.7 $15.1 $4.7
Truckload (JBT)$178.3 $166.6 $1.2 $2.0
Consolidated$2,944.0 $2,921.4 $194.4 $178.7

Operational KPIs (Q1)

KPIQ1 2024Q1 2025
Intermodal loads485,166 521,821
Intermodal revenue per load ($)$2,876 $2,816
Intermodal average tractors6,345 6,430
DCS loads1,004,337 942,894
DCS revenue per truck per week ($)$5,021 $5,127
ICS revenue per load ($)$1,803 $1,946
ICS gross profit margin (%)14.3% 15.3%
FMS stops1,076,689 920,344
JBT loads93,685 95,143
JBT revenue per load ($)$1,903 $1,751

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Capital ExpendituresFY 2025$700–$900M $500–$700M Lowered
Annual Effective Tax RateFY 202524.0%–25.0% 24.0%–25.0% Maintained
Dividend per shareQuarterly (Apr 2025)$0.44 (set Jan 2025) $0.44 (declared Apr 24) Maintained
Leverage targetOngoing~1x trailing EBITDA (target) ~1x trailing EBITDA (at target) Maintained
Share repurchase authorizationAs of 3/31/2025$882M at 12/31/2024 $650M remaining Reduced by buybacks

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Intermodal volumes/mixJBI volumes +5% in both Q3 and Q4; revenue per load down (−5% Q3; −6% Q4) amid mix and pricing pressure Record Q1 volume +8%; East +13%, Transcon +4%; revenue per load −2% Volume strength; mix trending more East, pressuring yields
Rate/margin repairQ3/Q4 noted yield pressure and network imbalance costs Management “mildly pleased” with bid season; disciplined on pricing, willing to walk away; margin repair multi‑cycle Improving network balance; pricing repair gradual
Truckload market capacityQ3 JBT revenue −12%; utilization mixed Weather‑induced tightness early, then capacity loosened; JBT profit improved via balance/cost discipline Market remains loose; internal execution improving
Mode conversion (highway → intermodal)Not central in Q3/Q4 8‑K narrativeCustomers focus on cost/efficiency; high engagement on highway→intermodal conversion Rising customer interest
Tariffs/macroNot highlighted in Q3/Q4 8‑KCustomers scenario‑planning; limited evidence of broad pull‑forward; watch import trajectories Elevated uncertainty
SafetyRecord performance referenced in Q4; ongoing focus On track for another record year in safety; Million Mile recognition press release Sustained strength
Mexico/West Coast flowsSeasonal strength eastbound SoCal in Q4 Strong Mexico volumes; monitoring West Coast imports and mix Expansion in Mexico; watch coastal flows

Management Commentary

  • CEO: “Beginning to repair our margins and improve our financial performance remains a top priority… we will exit from a position of strength” .
  • CFO: “Results… on the better side of the guidance range… seasonally lower volume and rate pressure, coupled with inflationary cost headwinds… weighed on margins” .
  • Intermodal President: “Record first quarter volume… mildly pleased with bid season… modest success repairing rates while retaining business; growing Eastern network” .
  • EVP Sales & Marketing: “Uncertain macro and trade policy are top of mind… customers planning for multiple scenarios… strong focus on cost reduction and mode conversion” .
  • DCS President: “Sold ~260 trucks of new deals; pipeline strong but some fleet losses in Q2; expect return to net fleet growth in 2025” .

Q&A Highlights

  • Pricing discipline and margin repair: JBHT achieved some rate increases but is willing to walk away when returns don’t pencil; margin repair likely requires more than one bid cycle .
  • Mix effects: Eastern network growth (shorter length of haul) drives lower revenue per load but not necessarily lower margins; benefits from filling empties to accrue through year .
  • Tariffs/pull‑forward: Limited direct evidence of broad pull‑forward; some Mexico pull‑forward observed briefly; customers remain cautious and adaptive .
  • Capacity stance: Excess containers are long‑term investments; exploring alternative utilization but not cutting capacity simply to affect pricing .
  • Mode conversion: Highway→intermodal conversion is a “#1 topic” with customers on back of strong service performance .

Estimates Context

  • Q1 2025 revenue beat: $2.921B actual vs. $2.902B* consensus; EPS beat: $1.17 vs. $1.145*; EBITDA miss: $358.2M actual vs. $366.0M* .
  • Drivers: Strong Intermodal volumes offset by yield pressure and cost inflation; DCS fleet downsizing and FMS demand weakness weighed; ICS mix/pricing improved margins .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Volume momentum but yield pressure: Record Intermodal volumes and Eastern network growth continue, but revenue per unit remains under pressure; margin repair is a multi‑cycle priority .
  • Cost inflation persists: Insurance and medical costs elevated across segments; management is leveraging productivity, utilization, and claims mitigation to offset .
  • Capital discipline: FY25 capex cut to $500–$700M and buybacks remain active ($234M in Q1; $650M authorization left); dividend held at $0.44 .
  • Pricing stance: Bid season outcomes mixed; disciplined pricing may cede some volume but supports long‑term returns; watch headhaul corridors for rate traction .
  • Watchlist catalysts: Evidence of margin repair in Intermodal through mid‑year, DCS net fleet growth timing, tariff outcomes affecting import mix, and continued mode conversion activity .
  • Near‑term trading: Modest beat on top/bottom line with EBITDA under consensus and cautious margin commentary suggests shares will trade on progress in pricing and network balance rather than volumes alone .
  • Medium‑term thesis: Strong franchise, safety culture, and capacity position JBHT to compound as pricing normalizes and mode conversion accelerates, with leverage at target and capex flexibility .