J.B. Hunt Transport Services (NASDAQ: JBHT), a US trucking and logistics group spanning intermodal rail-truck freight, dedicated contracts and brokerage, stunned investors with an unscheduled profit warning, sending its shares down 13.3% in a single session, their worst day in years.
Shares closed at $236.73 on Wednesday, down from $273.05 the previous session, before steadying at $236.80 on Thursday. That leaves the stock well below its 52-week high of $299.26, though still comfortably above the 52-week low of $129.06.
Speaking at a Morgan Stanley industrials conference on Tuesday evening, chief financial officer Brad Delco guided third-quarter earnings per share down 5% to 10% from the second quarter’s $1.91, reversing analysts’ expectations of sequential growth. Delco described “some of the most radical and abnormal swings in fuel prices” the company had seen, adding roughly $25 million of extra driver recruitment and retention costs to the pressure.
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The US national average diesel price hit a record $6.31 a gallon on Wednesday, according to AAA, linked to the US-Iran conflict. J.B. Hunt earns 96% of its operating income from intermodal and dedicated contracts, which reprice more slowly than standard trucking, leaving fuel and labour costs to outrun what it can charge customers. Peers Old Dominion, ArcBest and Knight-Swift fell in sympathy.
Broker Citizens upgraded J.B. Hunt to Outperform with a $300 price target the next day, arguing the roughly 18% pullback since second-quarter results made an attractive entry point despite the cost pressures.
Wire reports said J.B. Hunt’s management characterised the pressure as cyclical rather than structural, adding that underlying freight demand across intermodal and dedicated contracts had remained firm even as diesel costs and driver pay squeezed margins.
