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J.B. Hunt Transport Services, Inc. Reports U.S. GAAP Revenues, Net Earnings and Earnings Per Share for Both the Fourth Quarter and Year Ended December 31, 2022

01/18/2023
  • Fourth Quarter 2022 Revenue: $3.65 billion; up 4%
  • Fourth Quarter 2022 Operating Income: $281.9 million; down 13%
  • Fourth Quarter 2022 EPS: $1.92 vs. $2.28; down 16%
  • Full Year 2022 Revenue: $14.81 billion; up 22%
  • Full Year 2022 Operating Income: $1.33 billion; up 27%
  • Full Year 2022 EPS: $9.21 vs. $7.14; up 29%

J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced fourth quarter 2022 U.S. GAAP (United States Generally Accepted Accounting Principles) net income of $201.3 million, or diluted earnings per share of $1.92 versus fourth quarter 2021 net earnings of $242.2 million, or diluted earnings per share of $2.28.

Total operating revenue for the current quarter was $3.65 billion, compared with $3.50 billion for the fourth quarter 2021, an increase of 4%. Current quarter total operating revenue, excluding fuel surcharge revenue, decreased approximately 3% versus the comparable quarter 2021. This decrease was primarily driven by a 27% decline in volume in Integrated Capacity Solutions (ICS) and a 1% decline in volume in Intermodal (JBI). Revenue, excluding fuel surcharge revenue, performance was positively offset by a 14% increase in average revenue producing trucks and a 3% increase in fleet productivity (excluding fuel surcharge revenue) in Dedicated Contract Services® (DCS®), a 6% increase in revenue per load (excluding fuel surcharge revenue) in JBI, an increase in Final Mile Services® (FMS) revenue driven primarily by our recent acquisition, and a 6% increase in loads in Truckload (JBT) driven primarily by our J.B. Hunt 360box® service offering.

Total freight transactions in the Marketplace for J.B. Hunt 360˚® decreased 22% to $461 million in the fourth quarter 2022 compared to $593 million in the prior year quarter. ICS revenue on the platform decreased 29% to $308 million versus the year ago period. JBI executed approximately $33 million of third-party dray capacity on the platform, a decline of 31% year over year. JBT executed approximately $121 million of independent contractor and power-only capacity through the platform during the quarter, an increase of 7% versus the prior year period.

U.S. GAAP operating income for the current quarter totaled $281.9 million versus $322.5 million for the fourth quarter 2021. Current quarter operating income was negatively impacted by a $64 million pre-tax increase in casualty claim expense. Operating income performance was favorably impacted by customer rate and cost recovery efforts in JBI, DCS and FMS and an increase in revenue producing trucks and productivity in DCS. These items were partially offset by a decrease in volume in ICS and JBI; higher investments to attract and retain professional drivers, office personnel, and maintenance technicians; increases in equipment-related and maintenance expense, and higher insurance and safety costs.

Net interest expense in the current quarter increased primarily from higher interest rates from fourth quarter 2021. The fourth quarter effective tax rates for 2022 and 2021 were 25.7% and 22.6%, respectively. The annual effective tax rates for 2022 and 2021 were 24.4% and 23.9%, respectively. We expect our 2023 annual tax rate to be between 24.0% and 25.0%.

Segment Information:

Intermodal (JBI)

  • Fourth Quarter 2022 Segment Revenue: $1.75 billion; up 11%
  • Fourth Quarter 2022 Operating Income: $179.5 million; down 8%

Intermodal volume decreased 1% over the same period in 2021. Eastern network loads increased 8%, while transcontinental loads decreased 7% compared to the fourth quarter 2021. Demand for intermodal capacity was seasonally weak in the fourth quarter, while rail velocity and performance made further progress. Customer activity related to the detention of equipment also improved sequentially but continued to impact dray and network efficiencies. Revenue increased 11% for the quarter versus the prior year, driven by a 12% increase in revenue per load resulting from changes in mix of freight, customer rates, and fuel surcharge revenue. Revenue per load excluding fuel surcharge revenue was up 6% year over year.

Operating income decreased 8% in the fourth quarter primarily from lower volume; higher investments to attract and retain professional drivers, office personnel, and maintenance technicians; and higher insurance costs. These items were only partially offset by higher customer rates and cost recovery efforts compared to the prior year period. JBI incurred approximately $21.8 million of the incremental pre-tax casualty insurance expense. During the period we successfully onboarded 2,000 new units of container capacity. The current period ended with approximately 115,000 units of trailing capacity and approximately 6,700 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Fourth Quarter 2022 Segment Revenue: $880 million; up 24%
  • Fourth Quarter 2022 Operating Income: $75.8 million; up 4%

Demand for our highly engineered private-fleet outsourcing solution remained strong during the quarter. DCS revenue increased 24% year over year, primarily from a 14% increase in average revenue producing trucks and a 9% increase in productivity (revenue per truck per week) versus the same period 2021. Productivity excluding fuel surcharge revenue increased 3% from a year ago driven by increases in contracted indexed-based price escalators and stronger utilization of equipment. A net additional 1,210 revenue producing trucks were in the fleet by the end of the quarter compared to the prior year period, and a net reduction of 187 versus the end of the third quarter 2022. Customer retention rates remain above 98%.

Operating income increased 4% from the prior year quarter, primarily from new business onboarded over the past trailing twelve months, combined with greater productivity and utilization of equipment. These items were partially offset by higher equipment-related and maintenance expenses, higher safety costs, higher investments to attract and retain professional drivers, office personnel, and maintenance technicians, and other costs related to the implementation of new, long-term contractual business. The DCS segment incurred approximately $18.7 million of the incremental pre-tax casualty insurance expense.

Integrated Capacity Solutions (ICS)

  • Fourth Quarter 2022 Segment Revenue: $496 million; down 33%
  • Fourth Quarter 2022 Operating Loss: $(2.9) million; compared to $21.2 million income in 4Q’21

ICS revenue decreased 33% in the current quarter over the same period 2021. Overall segment volume decreased 27%, while truckload volume decreased 21% compared to the prior year period. Revenue per load decreased 9% compared to the fourth quarter 2021 due to changes in customer freight mix and lower contractual and transactional rates in our truckload business. Contractual volume represented approximately 62% of the total load volume and 61% of the total revenue in the current quarter compared to 54% and 43%, respectively, in fourth quarter 2021. Of the total reported ICS revenue, approximately $308 million was executed through the Marketplace for J.B. Hunt 360 compared to $431 million in fourth quarter 2021.

Operating income decreased by $24 million compared to the fourth quarter 2021 primarily from lower gross profit, increased insurance and claims expense and higher technology costs over the same period 2021. Gross profit declined 14% on lower revenue compared to prior year period while gross profit margin increased to 15.6% in the current period versus 12.2% in the prior period. ICS carrier base increased 15% year over year. The ICS segment incurred approximately $15.1 million of the incremental pre-tax casualty insurance expense in the quarter.

Truckload (JBT)

  • Fourth Quarter 2022 Segment Revenue: $276 million; up 6%
  • Fourth Quarter 2022 Operating Income: $16.9 million; down 35%

JBT revenue increased 6% compared to the same period in the previous year. Revenue excluding fuel surcharge revenue decreased 2% due to an 8% decline in revenue per load excluding fuel surcharge revenue partially offset by a 6% increase in load volume. Total average trailer count increased by approximately 3,900 units, or 37% versus the prior year period. Trailer turns in the quarter were down 21% from the prior period primarily due to freight mix and fewer load opportunities as a result of a softer freight market.

JBT operating income decreased 35% to $16.9 million versus the fourth quarter 2021. JBT continues to leverage the J.B. Hunt 360 platform to grow power capacity and capability for the J.B. Hunt 360box® service offering. Benefits from higher volume and revenue were more than offset by higher truck purchased transportation expense, trailer parts and maintenance costs, personnel costs, insurance and claims expense and continued technology investments to build out 360box. The JBT segment incurred approximately $5.1 million of the incremental pre-tax casualty insurance expense in the quarter.

Final Mile Services (FMS)

  • Fourth Quarter 2022 Segment Revenue: $255 million; up 15%
  • Fourth Quarter 2022 Operating Income: $12.6 million; up 70%

FMS revenue increased 15% compared to the same period 2021, primarily driven by the previously announced acquisition of Zenith Freight Lines, LLC (Zenith) and multiple new customer contracts implemented over the past trailing twelve months. Revenue growth continues to be partially offset by internal efforts to improve revenue quality of the business. Excluding the Zenith acquisition, which contributed approximately $26 million to segment revenue in the current quarter, FMS revenue increased 3% year over year.

Operating income increased 70% from the prior year period, primarily driven by an improvement in revenue quality which was partially offset by higher equipment-related and maintenance costs and increased insurance and claims expense. Additionally, investments in new system technology development and implementation costs for newly awarded business partially offset the improvement in revenue quality. The FMS segment incurred approximately $3.3 million of the incremental pre-tax casualty insurance expense in the quarter, and the prior year period included a $5.7 million benefit from the reduction of a contingent liability.

Cash Flow and Capitalization:

At December 31, 2022, we had total debt outstanding of $1.3 billion on various debt instruments which is comparable to the total debt levels at December 31, 2021, and versus $1.2 billion at September 30, 2022.

Our net capital expenditures for 2022 approximated $1.4 billion vs. $877 million in 2021. At December 31, 2022, we had cash and cash equivalents of $52 million.

We had no purchases of our stock during the fourth quarter 2022. At December 31, 2022, we had approximately $551 million remaining under our share repurchase authorization. Actual shares outstanding at December 31, 2022, approximated 103.7 million.

Conference Call Information:

The company will hold a conference call today from 8:00–9:00 a.m. CST to discuss the quarterly earnings. Investors will have the opportunity to listen to the conference call live over the internet by going to investor.jbhunt.com. Please log on 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an online replay of the earnings call webcast will be available a few hours after the completion of the call.

Forward-Looking Statements:

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2021. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available to interested parties on our website, www.jbhunt.com.

About J.B. Hunt

J.B. Hunt Transport Services, Inc., a Fortune 500 and S&P 500 company, provides innovative supply chain solutions for a variety of customers throughout North America. Utilizing an integrated, multimodal approach, the company applies technology driven methods to create the best solution for each customer, adding efficiency, flexibility, and value to their operations. J.B. Hunt services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, last mile, and more. J.B. Hunt Transport Services, Inc. stock trades on NASDAQ under the ticker symbol JBHT and is a component of the Dow Jones Transportation Average. J.B. Hunt Transport, Inc. is a wholly owned subsidiary of JBHT. For more information, visit www.jbhunt.com.

J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Three Months Ended December 31

2022

2021

% Of % Of
Amount Revenue Amount Revenue
 
Operating revenues, excluding fuel surcharge revenues $

3,017,278

$

3,106,488

Fuel surcharge revenues

632,344

390,483

 

Total operating revenues

3,649,622

100.0%

3,496,971

100.0%

 
Operating expenses
Rents and purchased transportation

1,742,167

47.7%

1,891,298

54.1%

Salaries, wages and employee benefits

879,924

24.1%

764,484

21.9%

Fuel and fuel taxes

234,229

6.4%

151,606

4.3%

Depreciation and amortization

171,606

4.7%

141,254

4.0%

Operating supplies and expenses

130,885

3.6%

98,035

2.8%

Insurance and claims

124,546

3.4%

50,261

1.4%

General and administrative expenses, net of asset dispositions

55,336

1.6%

52,955

1.6%

Operating taxes and licenses

19,076

0.5%

15,974

0.5%

Communication and utilities

9,905

0.3%

8,601

0.2%

Total operating expenses

3,367,674

92.3%

3,174,468

90.8%

Operating income

281,948

7.7%

322,503

9.2%

Net interest expense

11,189

0.3%

9,697

0.3%

Earnings before income taxes

270,759

7.4%

312,806

8.9%

Income taxes

69,456

1.9%

70,597

2.0%

Net earnings $

201,303

5.5%

$

242,209

6.9%

Average diluted shares outstanding

104,737

106,312

Diluted earnings per share $

1.92

$

2.28

 
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Twelve Months Ended December 31

2022

2021

% Of % Of
Amount Revenue Amount Revenue
 
Operating revenues, excluding fuel surcharge revenues $

12,381,359

$

10,915,442

Fuel surcharge revenues

2,432,640

1,252,860

Total operating revenues

14,813,999

100.0%

12,168,302

100.0%

 
Operating expenses
Rents and purchased transportation

7,392,179

49.9%

6,449,068

53.0%

Salaries, wages and employee benefits

3,373,063

22.8%

2,761,680

22.7%

Fuel and fuel taxes

931,710

6.3%

530,642

4.4%

Depreciation and amortization

644,520

4.4%

557,093

4.6%

Operating supplies and expenses

502,553

3.4%

369,294

3.0%

Insurance and claims

318,123

2.1%

165,052

1.4%

General and administrative expenses, net of asset dispositions

215,361

1.4%

195,616

1.5%

Operating taxes and licenses

68,230

0.5%

59,462

0.5%

Communication and utilities

36,707

0.2%

34,865

0.3%

Total operating expenses

13,482,446

91.0%

11,122,772

91.4%

Operating income

1,331,553

9.0%

1,045,530

8.6%

Net interest expense

50,180

0.4%

45,758

0.4%

Earnings before income taxes

1,281,373

8.6%

999,772

8.2%

Income taxes

312,022

2.1%

238,966

1.9%

Net earnings $

969,351

6.5%

$

760,806

6.3%

Average diluted shares outstanding

105,276

106,593

Diluted earnings per share $

9.21

$

7.14

 
 
 
Financial Information By Segment
(in thousands)
(unaudited)
 
 
Three Months Ended December 31

2022

2021

% Of % Of
Amount Total Amount Total
 
Revenue
 
Intermodal $

1,748,798

 

48%

$

1,574,174

 

45%

Dedicated

880,210

 

24%

712,419

 

20%

Integrated Capacity Solutions

496,197

 

14%

738,906

 

21%

Truckload

275,550

 

7%

259,078

 

8%

Final Mile Services

254,809

 

7%

221,907

 

6%

Subtotal

3,655,564

 

100%

3,506,484

 

100%

Intersegment eliminations

(5,942

)

(0%)

(9,513

)

0%

Consolidated revenue $

3,649,622

 

100%

$

3,496,971

 

100%

 
 
Operating income
 
Intermodal $

179,520

 

64%

$

195,337

 

61%

Dedicated

75,784

 

27%

72,638

 

23%

Integrated Capacity Solutions

(2,872

)

(1%)

21,190

 

6%

Truckload

16,916

 

6%

25,907

 

8%

Final Mile Services

12,630

 

4%

7,442

 

2%

Other (1)

(30

)

0%

(11

)

0%

Operating income $

281,948

 

100%

$

322,503

 

100%

 
 
 
Twelve Months Ended December 31

2022

2021

% Of % Of
Amount Total Amount Total
Revenue
 
Intermodal $

7,021,565

 

47%

$

5,453,511

 

44%

Dedicated

3,378,553

 

23%

2,578,322

 

21%

Integrated Capacity Solutions

2,385,797

 

16%

2,537,684

 

21%

Truckload

1,082,259

 

7%

795,850

 

7%

Final Mile Services

979,991

 

7%

841,963

 

7%

Subtotal

14,848,165

 

100%

12,207,330

 

100%

Intersegment eliminations

(34,166

)

(0%)

(39,028

)

(0%)

Consolidated revenue $

14,813,999

 

100%

$

12,168,302

 

100%

 
 
Operating income
 
Intermodal $

800,013

 

60%

$

602,540

 

58%

Dedicated

345,159

 

26%

304,125

 

29%

Integrated Capacity Solutions

59,225

 

4%

46,324

 

4%

Truckload

92,410

 

7%

64,940

 

6%

Final Mile Services

34,912

 

3%

27,909

 

3%

Other (1)

(166

)

0%

(308

)

0%

Operating income $

1,331,553

 

100%

$

1,045,530

 

100%

 
 
(1) Includes corporate support activity
 
Operating Statistics by Segment
(unaudited)
 
Three Months Ended December 31

2022

2021

 
Intermodal
 
Loads

503,340

 

509,264

 

Average length of haul

1,663

 

1,693

 

Revenue per load $

3,474

 

$

3,091

 

Average tractors during the period *

6,748

 

6,161

 

Tractors (end of period) *

6,696

 

6,194

 

Trailing equipment (end of period)

115,150

 

104,973

 

Average effective trailing equipment usage

105,314

 

102,926

 

 
 
Dedicated
 
Loads

1,102,319

 

1,053,733

 

Average length of haul

166

 

160

 

Revenue per truck per week** $

5,306

 

$

4,879

 

Average trucks during the period***

13,037

 

11,441

 

Trucks (end of period) ***

12,899

 

11,689

 

Trailing equipment (end of period)

28,322

 

28,822

 

 
 
Integrated Capacity Solutions
 
Loads

267,989

 

364,620

 

Revenue per load $

1,852

 

$

2,027

 

Gross profit margin

15.6

%

12.2

%

Employee count (end of period)

984

 

975

 

Approximate number of third-party carriers (end of period)

156,400

 

136,400

 

Marketplace for J.B. Hunt 360 revenue (millions) $

307.6

 

$

431.4

 

 
 
Truckload
 
Loads

131,631

 

123,782

 

Average trailers during the period

14,395

 

10,524

 

Revenue per load $

2,093

 

$

2,093

 

Average length of haul

550

 

501

 

 
Tractors (end of period)
Company-owned

620

 

734

 

Independent contractor

2,098

 

1,501

 

Total tractors

2,718

 

2,235

 

 
Trailers (end of period)

14,718

 

11,172

 

 
 
Final Mile Services
 
Stops

1,290,856

 

1,450,208

 

Average trucks during the period***

1,864

 

1,565

 

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
 
Operating Statistics by Segment
(unaudited)
 
Twelve Months Ended December 31

2022

2021

 
Intermodal
 
Loads

2,068,278

 

1,984,834

 

Average length of haul

1,665

 

1,684

 

Revenue per load $

3,395

 

$

2,748

 

Average tractors during the period *

6,601

 

5,904

 

Tractors (end of period) *

6,696

 

6,194

 

Trailing equipment (end of period)

115,150

 

104,973

 

Average effective trailing equipment usage

107,319

 

98,798

 

 
 
Dedicated
 
Loads

4,406,527

 

4,020,308

 

Average length of haul

165

 

161

 

Revenue per truck per week** $

5,225

 

$

4,719

 

Average trucks during the period***

12,564

 

10,628

 

Trucks (end of period) ***

12,899

 

11,689

 

Trailing equipment (end of period)

28,322

 

28,822

 

 
 
Integrated Capacity Solutions
 
Loads

1,231,334

 

1,326,979

 

Revenue per load $

1,938

 

$

1,912

 

Gross profit margin

14.7

%

11.8

%

Employee count (end of period)

984

 

975

 

Approximate number of third-party carriers (end of period)

156,400

 

136,400

 

Marketplace for J.B. Hunt 360 revenue (millions) $

1,521.1

 

$

1,583.8

 

 
 
Truckload
 
Loads

500,407

 

445,812

 

Average trailers during the period

12,798

 

9,299

 

Revenue per load $

2,163

 

$

1,785

 

Average length of haul

520

 

482

 

 
Tractors (end of period)
Company-owned

620

 

734

 

Independent contractor

2,098

 

1,501

 

Total tractors

2,718

 

2,235

 

 
Trailers (end of period)

14,718

 

11,172

 

 
 
Final Mile Services
 
Stops

5,432,627

 

6,413,680

 

Average trucks during the period***

1,814

 

1,520

 

 
 
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 

December 31, 2022

December 31, 2021

ASSETS
Current assets:
Cash and cash equivalents $

51,927

$

355,549

Accounts Receivable, net

1,528,075

1,506,619

Prepaid expenses and other

587,534

451,201

Total current assets

2,167,536

2,313,369

Property and equipment

7,999,480

6,680,316

Less accumulated depreciation

3,019,663

2,612,661

Net property and equipment

4,979,817

4,067,655

Other assets, net

594,988

413,324

$

7,742,341

$

6,794,348

 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $

-

$

355,972

Trade accounts payable

798,776

772,736

Claims accruals

452,149

307,210

Accrued payroll

188,252

190,950

Other accrued expenses

129,054

102,732

Total current liabilities

1,568,231

1,729,600

 
Long-term debt

1,261,738

945,257

Other long-term liabilities

369,314

256,233

Deferred income taxes

876,290

745,442

Stockholders' equity

3,666,768

3,117,816

$

7,742,341

$

6,794,348

 
 
 
Supplemental Data
(unaudited)
 

December 31, 2022

December 31, 2021

 
Actual shares outstanding at end of period (000)

103,743

105,094

 
Book value per actual share outstanding at end of period $

35.34

$

29.67

 
 
 
Twelve Months Ended December 31

2022

2021

 
Net cash provided by operating activities (000) $

1,776,882

$

1,223,898

 
Net capital expenditures (000) $

1,431,895

$

877,018

 

Brad Delco
Senior Vice President – Finance
(479) 820-2723

Source: J.B. Hunt Transport Services, Inc.

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