(Reuters) -U.S. trucking firm JB Hunt Transport Services reported a 24% fall in second-quarter profit on Tuesday as a result of continued weakness in their truckload and intermodal businesses.
In the United States, the trucking industry has continued to follow a downward trend since 2022 owing to higher capacity, lower rates and no substantial increase in volumes, hinting for the downturn to continue beyond 2024.
Volumes at JB Hunt's intermodal segment, which involves transporting goods via two or more modes, were down 1%.
Operating income declined 31% in the intermodal segment on higher wage costs for both driver and non-driver, underutilized equipment ownership expenses, increased spending on maintenance, and higher cost for insurance and claims compared to revenue.
"While experiencing some seasonal build in demand through the quarter, overall performance continued to be pressured by the soft freight market and its impact on over-the-road truck competition in the eastern network," JB Hunt said in the statement.
"JB Hunt's flagship intermodal segment continued to see revenue and margin pressure from stubbornly depressed rates in the competing truckload sector (missing consensus expectations), though on the positive side, the firm saw the return of some normal seasonal volume patterns," said Morningstar analyst Matthew Young.
The Arkansas-based company posted a quarterly revenue of $2.93 billion, while it reported a per-share profit of $1.32, down from $1.81 a year ago.
Revenues at its final mile services rose 5% to $235 million, while its truckload segments reported a 12% decline in revenue.
Shares of the company, which closed 3.7% higher on Tuesday, reversed course in aftermarket trading, falling 2.5% after the results.
(Reporting by Abhinav Parmar and Pratyush Thakur in Bengaluru; Editing by Alan Barona)
By Abhinav Parmar and Pratyush Thakur
