What's in the Offing for J.B. Hunt (JBHT) in Q3 Earnings?

J.B. Hunt Transport Services Inc. JBHT is scheduled to release third-quarter 2017 results on Oct 13.

Last quarter, the company posted a negative earnings surprise of 4.35%. The transportation company’s earnings of 88 cents per share missed the Zacks Consensus Estimate of 92 cents. Total operating revenue increased 6.9% year over year to $1,726 million but marginally fell short of the Zacks Consensus Estimate of $1,733.1 million. 

Let’s see how things are shaping up for this earnings season.

Factors at Play

J.B. Hunt has been struggling with declining demands for quite some time now. Like the previous quarter, high costs may hurt the company’s third-quarter earnings too. Lower customer rates may further affect results in the earnings.

Being a highly leveraged company, J.B. Hunt’s high-debt levels raise concerns. This is evident from the fact that its long-term debt-to-equity ratio (expressed as a percentage) is currently 67, comparing unfavorably with its industry’s figure of 33.8.

Driven by downtrends, shares of J.B. Hunt have underperformed its industry in the last six months. The stock has gained 17.8% compared with the industry’s rally of 23.4% during the period.

However, the company’s expansion efforts are appreciative. In July, the company had acquired Special Logistics Dedicated with potential to enhance e-commerce delivery capabilities. Its efforts to reward shareholders through dividend payments and share repurchases also raise optimism.

Earnings Whispers

Our proven model does not conclusively show that J.B. Hunt is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.

Zacks ESP: The Earnings ESP of J.B. Hunt is -1.85% as the Most Accurate estimate is pegged marginally lower at 96 cents per share than the Zacks Consensus Estimate, poised at 97 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: J.B. Hunt currently has a Zacks Rank #3, which increases the predictive power of ESP. However, combined with a negative Earnings ESP, the surprise prediction is left inconclusive.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement.

J.B. Hunt Transport Services, Inc. Price and EPS Surprise

 

J.B. Hunt Transport Services, Inc. Price and EPS Surprise | J.B. Hunt Transport Services, Inc. Quote

Stocks to Consider

Investors interested in the broader Transportation sector may consider C.H. Robinson Worldwide, Inc. CHRW, Norfolk Southern Corporation NSC and Union Pacific Corporation UNP, as our model shows them to possess the right combination of elements to beat on earnings in their next releases.

C.H. Robinson has an Earnings ESP of +0.06% and a Zacks Rank #3. The company will reportthird-quarter 2017 resultson Oct 31.

Norfolk Southern has an Earnings ESP of +1.36% and a Zacks Rank #3. The company will reportthird-quarter 2017 resultson Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Union Pacific has an Earnings ESP of +0.07% and a Zacks Rank #3. The company will release third-quarter 2017 earnings numbers on Oct 26.

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