JB Hunt’s record intermodal shipments in Q4 came with higher costs.

JB Hunt said the peak season in its intermodal and highway services segments was strong and some customers were securing capacity earlier than normal, which is usually a risk for an improvement environment.

The Lowell, Arkansas-based multimodal transportation provider reported earnings per share of $1.53 after the market closed. The result includes an approximately 13-cent windfall, or $16 million, from intangible asset impairments. The current consensus estimate is $1.62 per share and is in line with the company’s earnings excluding charges.

Consolidated revenue fell 5% year over year to $3.15 billion. Adjusted operating income of $223 million (excluding impairment) was down 13% year over year.

The company guided for a 20 to 25% sequential decline in consolidated operating income (taking into account one-time charges) from the fourth to first quarter, assuming normal seasonal trends. This is equivalent to 10 years of experience excluding the two outbreaks.

Fourth-quarter results and guidance sent shares of JB Hunt (NASDAQ: JBHT ) up 11.1% in after-hours trading Thursday.

Operating income, margins and earnings per share are adjusted to exclude one-time charges from the fourth quarter of 2024 as well as insurance-related items of $53.4 million in various segments during the fourth quarter of 2023.

Intermodal revenue fell 2% y/y to $1.6 billion as freight increased 5%, but revenue per load fell 6% (down 3% excluding fuel surcharges). JB Hunt saw record volumes in the quarter, with transcontinental movements up 4% and Eastern loads up 6%, despite higher freight rates despite the mode’s lower truckload rates.

According to the Association of American Railroads, total intermodal traffic among US Class I railroads increased 9% y/y in the quarter.

Chart: (ORAILDOML.USA). Daily volume of intermodal containers moving in the United States, Canada, and Mexico. The index is a 7-day moving average using the date of entry of containers at the origin. Intermodal trailers (trailer-on-flatcars, or TOFCs) are not included. To learn more about SONAR, Click here.

The segment recorded an operating ratio of 92.7% (inverse of operating margin), which was 170 bps worse y/y (70 bps worse than prior year excluding insurance premium). There was a headwind in costs associated with higher volume and positioning equipment, as well as the addition of 800 intermodal drivers for the peak season.

Management said on Thursday’s call at partner BNSF (NYSE: BRK.B ) that rail service had been in decline for several weeks at the beginning of the quarter, which was on edge. However, management said the recent service issues in the West were related to recording volumes and not structural in nature.

Revenue per shipment rose slightly for the second straight quarter, but pricing headwinds from recent tender negotiations remain in the first half of 2025. The company said compliance with customer bids has improved and expects to see price increases. In future auctions to offset cost inflation.

The story continues

JB Hunt said customer satisfaction was at an all-time high for the quarter.

Net income fell 5% to $839 million as average trucks in service fell 4% and revenue per truck fell 1% week over week. The company added 440 new trucks to service in the quarter (up from 1,700 for the full year), but the additions took a toll on customer accounts.

Fleet losses may continue into the early second quarter, but the company expects to increase net production by 800 to 1,000 trucks this year.

The segment recorded an OR of 89.2%, which was 120 bps worse y/y last year excluding non-recurring charges. Excluding start-up costs on new accounts, the company’s mature business OR is 86% to 88% and is in line with its long-term target.

Brokerage segment revenue fell 15% y/y to $308 million as loads fell 22%, partly due to a 9% increase in per load. (Loads were up 7% sequentially, while revenue per load was 3% higher.) The division cut costs and reduced headcount by 30% y/y. However, $21.8 million (a loss of $5.8 million excluding asset impairment charges, partially due to Finding BNSF Logistics Brokerage Jobs).

Integration and impairment charges of approximately $35 million from the acquisition will not be repeated this year. The company still wants to reduce costs in the business.

JB Hunt incurred $100 million in total operating expenses (depreciation and storage charges) related to excess capacity in its intermodal and freight divisions. That number has now reached $60 million.

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