J.B. Hunt Transport Services Inc. said Monday, April 14, that its first-quarter profit tumbled 18 percent because of a jump in fuel prices and weak freight demand. The company earned $36.4 million, compared with $44.2 million for the same quarter in 2006. Total operating revenue rose 10 percent to $878.4 million from $797.5 million in the year-ago period.
Company officials said the increase in revenue was partially a result of higher volumes at its intermodal segment, and growth at its integrated capacity solutions segment. Revenue from the company’s truck segment fell 14 percent to $185 million, mainly as a result of a 16 percent decrease in loads, the company said. The cost of fuel and fuel taxes rose 28 percent to $134 million from $105 million in the same quarter last year.
“Given the unprecedented rise in fuel prices during the first quarter 2008 and extreme weakness in freight demand in our truck segment, we are actually quite pleased with the relative performance of our company,” said Kirk Thompson, president and chief executive officer of the Lowell, Ark.-based company. “In what may be recorded as the worst freight recession in a long time, our diversified transportation model of providing excellent service and value creation to our customers has held up exceptionally well.”
Thompson said J.B. Hunt continues “to move further away from an asset-heavy truckload model to a more variable cost structure, which should produce free-cash flow and feature transportation services that reflect our competitive advantages.”