Published on 10 Apr 2024 on Zacks via Yahoo Finance

Here's Why Investors Should Avoid J.B. Hunt (JBHT) Stock Now

J.B. Hunt Transport Services, Inc.’s JBHT top line continues to grapple with lower revenues across all the business segments, mainly due to a combination of lower volume and customer rates. JBHT’s fourth-quarter 2023 revenues of $3,303.70 million surpassed the Zacks Consensus Estimate of $3,236.2 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year. The downfall was due to a 12% and 7% decline in volume in Integrated Capacity Solutions (ICS) and Truckload (JBT), respectively, a 10% and 13% decline in revenue per load, excluding fuel surcharge revenue in Intermodal (JBI) and JBT, respectively, and a 12% decline in stops in Final Mile Services (FMS). These were partially offset by a 6% increase in volume in JBI, a 3% increase in productivity (revenue per truck per week excluding fuel surcharge revenue) in Dedicated Contract Services (DCS), and the revenue contribution from the acquisition of the brokerage assets of BNSF Logistics.

Higher net interest expense is likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for 2023 increased 16.2% year over year due to higher effective interest rates.

J.B. Hunt’s weak cash position is worrisome. JBHT's cash and cash equivalents stood at $53.34 million at the end of the fourth quarter of 2023, much lower than the long-term debt of $1,326.10 million.