J.B. Hunt Transport Services Inc. reported an 11 percent increase in revenues during a third quarter in which a one-time, $25 million litigation charge and increasing fuel prices slowed earnings growth.
The Lowell, Ark.-based longhaul carrier reported on Friday, Oct. 14 revenues of $801.1 million for the quarter ended Sept. 30, compared to $718.6 million in the third quarter of 2004. However, profitability tumbled 17 percent to $39.8 million, or 25 cents per share, compared to $47.9 million, or 29 cents per share, in the same year-ago quarter. The carrier missed the average earnings estimates of 33 cents per share from 15 analysts surveyed by Thomson Financial.
J.B. Hunt said last month’s settlement of a 15-month-old intermodal pricing dispute with Burlington Northern Santa Fe Railway Co. translated to a 10-cent charge in the third quarter. The two companies entered into a revenue-sharing agreement in 1989. However, a dispute arose when Burlington Northern sought a larger percentage of the shared revenue and J.B. Hunt balked. The carrier said the dispute would reduce earnings in the fourth quarter and beyond by 2 cents per diluted share.
Fuel prices also were cited as one of the several reasons for increasing its company’s operating ratio. That ratio increased to 89.5 percent for the third quarter, compared to 87.1 percent in the same year-ago quarter. The company said the lag between the higher cost of diesel fuel and the recovery of that cost through higher fuel surcharges resulted in a temporary negative impact on operating income.
Rate per mile increased 4.5 percent to $1.774 per mile. J.B. Hunt said freight demand increased steadily throughout the quarter, with 5,409 trucks delivering 226,103 loads compared with 230,114 loads in the third quarter of 2004.
The company’s truck segment and dedicated contract services gross revenues both increased 8 percent to $258.5 million and $218.7 million, respectively, from $237.5 million and $201.2 million, respectively, in the third quarter of 2004.
“We have managed our business in a way that has achieved some of the best margins in the relative segments,” Kirk Thompson, J.B. Hunt’s president and CEO, said in a statement.