J.B. Hunt posts lower 1Q earnings, higher revenue

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J.B. Hunt Transport Services on Monday, April 16, announced first-quarter 2007 net earnings of $44.2 million, down from 2006 first-quarter earnings of $49.0 million. Total operating revenue for the current quarter was $797 million, a 2 percent increase from the $780 million for the first quarter of 2006. The company said the increase in operating revenue was attributable primarily to growth in its intermodal, dedicated contract services and integrated capacity solutions segments.

The company said its combined tractor fleet grew from 11,925 in the first quarter of 2006 to 11,971 in the first quarter of 2007. Containers and trailers grew from 50,215 to 54,814 over the same period. J.B. Hunt said the growth in the fleet was to support its additional intermodal and dedicated business.

Operating income for the current quarter declined slightly to $80.4 million vs. $81.4 million for the first quarter of 2006. Net interest expense increased significantly from $0.5 million in the first quarter of 2006 to $7.4 million in the first quarter of this year, primarily due to higher levels of debt. The company said these increased borrowings were related to its purchases of revenue equipment and treasury stock.

“During the first quarter of 2007, we experienced softer freight volumes in our truck and integrated capacity solutions segments, harsh winter weather that negatively impacted all our segments in February, the adoption of FIN 48 that resulted in a higher effective income tax rate and additional interest expense, and the write-off of unamortized fees from renegotiation of previous credit facilities,” said Kirk Thompson, president and chief executive officer of Lowell, Ark.-based J.B. Hunt. “Despite those significant obstacles, we still produced an operating ratio under 90 percent and diluted EPS of 30 cents, which represents the second-best EPS performance for a first quarter in our history.”