JB Hunt Stock Drops as Logistics Company’s Earnings Miss Estimates Amid Soft Demand

J.B. Hunt Transport Services (JBHT) fell nearly 8% in premarket trade Wednesday morning after the transportation and logistics company posted quarterly results that missed analysts’ expectations amid softer demand.

The Lowell, Arkansas-based firm late Tuesday posted first-quarter earnings of $1.22 per share, falling considerably short of Wall Street’s expectation of $1.53 a share. Revenue in the period of $2.94 billion fell from $3.23 billion in last year’s corresponding quarter and came in below the $3.11 billion expected by analysts.

The transportation giant said a 9% contraction in gross revenue per load in both its Intermodal and Truckload divisions, along with 22% fewer loads in its Integrated Capacity Solutions business, weighed down the top line.

The carriers’ final mile segment, which delivers items such as furniture and appliances directly to homes and businesses, was a bright spot in the quarter, reporting revenue growth of 2% year-over-year (YOY) thanks to new contracts signed over the past year.

Volumes in J.B. Hunt’s truck-rail Intermodal business, which accounts for 47% of the company’s total revenue, were flat in the period due to weaker demand amid increased trucking competition across its Eastern network. According to the Intermodal Association of North America, total intermodal volumes across the sector jumped 8.8% in the first quarter amid surging international container imports, but intermodal truck volumes slumped 24.8% over the period.

Executives told analysts on the company’s earnings call that the intermodal market has been more competitive than expected, but that the transporter is looking to offer shorter-term programs and work with rail providers to improve its competitiveness.

J.B. Hunt shares have oscillated within a broad ascending channel over the past 20 months to establish clear support and resistance levels on the chart. Amid expected earnings-related weakness, investors should monitor if buyers can defend the pattern’s lower trendline, currently sitting around $174. A successful hold of this crucial level could lead to a shift in sentiment resulting in a reversal back to the upside.

J.B. Hunt shares were down 7.9% at $168.49 about an hour before the opening bell.

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As of the date this article was written, the author does not own any of the above securities.