J. B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the Fourth Quarter and Year Ended December 31, 2008
- Fourth Quarter 2008 Revenue: $880 million; down 7%
- Fourth Quarter 2008 Operating Income: $86 million; down 11%*
- Fourth Quarter 2008 EPS: 41 cents vs. 42 cents*
- Full Year 2008 Revenue: $3.73 billion; up 7%
- Full Year 2008 Operating Income: $358 million; down 3%*
- Full Year 2008 EPS: $1.56 vs. $1.55*
LOWELL, Ark.-J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2008 net earnings of $53.3 million, or diluted earnings per share of 41 cents vs. 2007 fourth quarter earnings of $54.3 million, or 42 cents per diluted share. Financial results for the current quarter include a $3.1 million pretax charge, or $0.02 per diluted share, to write down to estimated fair value, certain trailing equipment held for sale. Fourth quarter 2007 results reflected an $8.4 million pretax charge, or $0.04 per diluted share, to write down to estimated fair value, certain assets (tractors and trailing equipment) held for sale.
Total operating revenue for the current quarter was $880 million, a 7% decline, compared with the $945 million for the fourth quarter 2007. Intermodal (JBI) volumes increased by approximately 7%, resulting in a small increase in segment revenue and Integrated Capacity Solution’s (ICS) revenue rose by 67%. Those increases were offset by declining fuel surcharge revenues in all segments and a softening of customer demand. Current quarter operating revenue, excluding fuel surcharges, declined 6%, compared with the same period of 2007.
Operating income for the current quarter declined to $86 million vs. $96 million for fourth quarter 2007. These results reflect pretax charges of $3.1 million in 2008 and $8.4 million in 2007, as discussed above. All of these charges were recognized in the Truck business segment. Net interest expense declined approximately $8.5 million during the current quarter, compared with the same period of 2007, primarily due to a refund of interest paid to the IRS from the 1999 tax case settlement, lower accrued interest on uncertain tax positions and the reduction of outstanding debt. The effective income tax rate was 35.8% in 2008 vs. 35.5% in 2007.
Substantially all of the tractors that were held for sale and written down to estimated fair value at December 31, 2007 were sold or traded during 2008. Approximately 120 of those tractors remain on hand at December 31, 2008 and are expected to be sold or traded during 2009. Approximately 980 trailers which were held for sale and written down to estimated fair value at December 31, 2007 were still on hand at December 31, 2008. These trailers are also expected to be sold or traded in 2009. An additional group of approximately 1,100 trailers was designated as held for sale and written down to estimated fair value at December 31, 2008. These trailers should be sold or traded during 2009.
“Flat years, as defined by net earnings, are certainly never our goal. However, we are quite pleased that we were able to sustain our earnings in the face of an extremely difficult environment. Our clear strategy over the last few years has been to reduce our exposure to the more cyclical, capital intensive segments of the freight market. At the same time, we have expanded in segments where we believed we could offer our customers a differentiated service at the best value.
“Strategy alone, of course, is only the beginning. We have a great team of people who understand and embrace our strategy and know how to execute our businesses. Their performance, combined with our focused strategy, not only allowed us to preserve earnings but to pay off $280 million of debt during the year.
“It is not clear to us how long the challenging economic environment will persist. But we are confident our strategy is sound, our Company is financially strong, and our people will continue to execute at the highest levels our customers have come to expect from us,” said Kirk Thompson, JBHT President and CEO.
* 4Q 2008 includes a $3.1 million pretax charge to write down the value of certain trailing equipment held for sale.
4Q 2007 includes an $8.4 million pretax charge to write down the value of certain assets held for sale.
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