- J.B. Hunt stock slid as much as 13% on Wednesday after an earnings report that missed estimates.
- Demand for its freight services was weaker than expected in the first quarter.
- The firm is a bellwether for the freight industry, which has been mired in a post-pandemic recession.
A leading freight company is seeing its stock tank after weak trucking volumes led to a first-quarter earnings miss on both profit and sales.
JB Hunt shares slid as much as 13% on Wednesday after the company posted a profit of $127.5 million, which was $70.3 million less than it earned in the same period last year. Meanwhile, revenue missed forecasts of $3.11 billion, and instead slumped 9% to $2.94 billion.
The bellwether firm’s difficulties are not a good look for the broader freight market, which has been toiling through an extensive slowdown since the pandemic years. Driving the contraction are weak sales and an overload of trucks.
“Demand remains weak and we’re not seeing a breakout, and that’s exemplified with what’s going on with spot pricing in the market, where pricing is remaining at really historically low levels,” Ken Hoexter, Bank of America’s senior transportation analyst, told CNBC. “And it certainly was even weaker than expected, just given those results.”
JB Hunt first sounded alarm over a potential “freight recession” in last year’s first quarter earnings conference call, then noting that pandemic over-buying depressed goods demand in the years that followed, weighing heavily on the freight and transport industry.
This continued through 2023, marked by rising trucking unemployment and the exit of a number of major carriers. Current trucking spot rates have fallen 6.5% so far this year, DAT Solutions said, according to WSJ.
Part of JB Hunt’s dilemma comes from rising competition from Eastern truck companies, which has slashed into its domestic intermodal services. These truck-to-rail offerings, a core segment of the company’s revenue, dropped 9% from last year’s quarter.
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