J.B. Hunt Transport Services Inc. on Wednesday, April 13, announced record first-quarter 2011 net earnings of $50.1 million vs. first quarter 2010 net earnings of $37.5 million. Total operating revenue was $1 billion compared with $845 million.
The company said all four segments contributed to its increase in operating revenue. Load growth of 15 percent in Intermodal helped drive a 23 percent increase in segment revenue. The Integrated Capacity Solutions and Dedicated Contract Services segments increased operating revenue by 22 percent and 15 percent, respectively, while Truck revenue rose 6 percent. Total operating revenue, excluding fuel surcharges, increased 13 percent.
Operating income totaled $90 million vs. $67 million. All of the company’s segments contributed to the increase, with Intermodal accounting for more than $15 million of the increase and Truck more than $5 million, while Integrated Capacity Solutions and Dedicated Contract Services combined to add about $2 million. Insurance and claims costs were lower, partly due to reduced accident severity. Net interest expense rose $1.9 million primarily due to higher debt.
“Our blend of complementary and diversified services resulted in a 34 percent increase in earnings over the same period last year and a record high for any first quarter,” said John Roberts, president and chief executive officer of the Lowell, Ark.-based company. “We leveraged our ability to create value for our customers by continuing the cost-effective assignment of assets and services. With the effects of winter weather and rapidly rising fuel costs, it was a tough quarter to get through as well as we did. Our great people in the business segments and in the corporate support groups got it done. I am very proud of the entire team.”
Truck reported revenue of $119 million vs. $113 million. J.B. Hunt said the 2011 quarter showed unseasonably strong demand in each month, while weather also contributed to tight capacity and caused unexpected costs that negatively impacted the segment’s operating income. Excluding fuel surcharges, revenue increased by 1.2 percent despite a 12 percent reduction in tractors. The company’s tractor count was 2,497 compared to 2,831. Rate per loaded mile, excluding fuel surcharges, increased about 9 percent on a 4 percent longer length of haul, multiplying the effect of the year-over-year rate change. Rates from consistent shippers improved by 4 percent.
Fuel prices increased significantly throughout the 2011 quarter, and J.B. Hunt said that in periods of steadily increasing fuel prices, surcharge programs cannot totally offset actual costs. The company said it continuously performs comprehensive reviews of customer base pricing, and in the 2011 quarter, it expanded its approach to also focus on fuel surcharge programs that fail to recover extraordinary fuel cost increases.