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What's in Store for J.B. Hunt (JBHT) Stock in Q4 Earnings?

J.B. Hunt Transport Services, Inc. JBHT is scheduled to report fourth-quarter 2020 results on Jan 19, after market close.

The Zacks Consensus Estimate for fourth-quarter earnings has been revised 8.6% downward to $1.28 per share in the past 90 days. The company has a disappointing record with respect to earnings surprise. Its earnings outpaced the Zacks Consensus Estimate in one of the last four quarters, while missing in the remaining three.  

Against this backdrop, let’s discuss the factors that might have impacted J.B. Hunt’s performance in the December quarter.

 

Akin to the third quarter, J.B. Hunt’s fourth-quarter performance is likely to have been dented by coronavirus-induced low volumes. The Zacks Consensus Estimate for revenues in the Dedicated Contract Services and Intermodal segment indicates a 20.8% and 1% decrease, respectively, on a year-over-year basis.

Escalating operating expenses stemming from high wages for drivers and increased rail purchased transportation costs are expected to have affected J.B. Hunt’s bottom line.  Notably, the Zacks Consensus Estimate for operating income at truckload segment plunged 33.1% on a year-on-year basis.

Meanwhile, rapid expansion of the company’s Final Mile network (delivery of goods to customer’s doorstep) is expected to have outweighed traditional freight. The Zacks Consensus Estimate for revenues in the Final Mile services segment indicates 2.2% growth sequentially.

The Integrated Capacity Solutions (ICS) segment is also likely to have performed well during the quarter under review. The Zacks Consensus Estimate for revenues in the ICS segment suggests an increase of 15.9% from the year-ago quarter’s levels.

Earnings Whispers

The proven Zacks model does not predict a beat for J.B. Hunt this time around. Notably, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise as elaborated below. However, this is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: J.B. Hunt has an Earnings ESP of -0.39% as the Most Accurate Estimate is pegged at $1.27, lower than the Zacks Consensus Estimate of $1.28. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt carries a Zacks Rank #2.

Highlights of Q3 Earnings

J.B. Hunt's earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26.  Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its JBI unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Canadian Pacific Railway Limited CP, CSX Corporation CSX and Union Pacific Corporation UNP as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Canadian Pacific has an Earnings ESP of +0.15% and is Zacks #3 Ranked, presently. The company will release fourth-quarter 2020 results on Jan 27.

CSX has an Earnings ESP of +2.23% and a Zacks Rank of 3 at present. The company will release fourth-quarter 2020 results on Jan 21.

Union Pacific has an Earnings ESP of +1.71% and is currently a #3 Ranked player. The company will release fourth-quarter 2020 results on Jan 21.

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J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
 
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