J.B. Hunt beats Q2 estimates as intermodal revenue jumps 22%

J.B. Hunt Transport Services reported Q2 EPS of $1.91, beating estimates by $0.18, as intermodal revenue jumped 22%.

"Our second quarter results reflect the strength of executing our strategy, as we leveraged our investments in our people, technology, and capacity to drive growth and improve profitability," Shelley Simpson, president and chief executive officer, said.

Revenue reached $3.50 billion, up 19% from a year earlier and above the $3.19 billion consensus. Operating income rose 32% to $259.5 million. Net income climbed 41% to $181 million.

Shares rose 4.2% in after-hours trading. The company now expects its 2026 annual tax rate between 24.0% and 24.5%, down from the prior 24.0%-25.0% range.

Intermodal powers the quarter

The intermodal segment, J.B. Hunt's largest, generated $1.75 billion in revenue, up 22% year over year. Operating income surged 58% to $150.9 million. Volume increased 10%, with eastern network loads rising 16% and transcontinental loads up 5%. Revenue per load excluding fuel surcharge rose 1%.

Dedicated Contract Services posted $921 million in revenue, up 9%, with operating income of $102.5 million, also up 9%. Customer retention improved to about 96%.

Integrated Capacity Solutions, the brokerage unit, reached an inflection point. Revenue soared 49% to $388 million, and the segment returned to an operating profit of $1.7 million after a $3.6 million loss a year earlier. Gross profit margin narrowed to 12.5% from 15.5% but improved sequentially from 12.0% in the first quarter.

Final Mile Services revenue fell 6% to $198 million, and operating income dropped 30% to $5.6 million. Truckload revenue rose 35% to $240 million, though the segment posted an operating loss of $1.3 million versus a $3.4 million profit a year ago, weighed down by higher purchased transportation costs.

Buyback and balance sheet

J.B. Hunt purchased about 392,000 shares for roughly $98 million during the quarter. At June 30, about $791 million remained under its share repurchase authorization. Total debt stood at $1.15 billion, down from $1.72 billion a year earlier. Net capital expenditures for the first half totaled $144.9 million, compared with $399.1 million in the same period last year.

The beat validates the freight recovery thesis that has driven J.B. Hunt shares up 45% year to date. Investors will watch the earnings call later today for management's outlook on intermodal pricing and whether ICS margin recovery can sustain into the second half.

This article is for informational purposes only and does not constitute investment advice.