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

J.B. Hunt Transport Services Inc. JBHT is set to release fourth-quarter 2016 results, before the market opens on Jan 19.

In the third quarter, the company posted a negative earnings surprise of 4.90% as it results were hurt by higher operating expenses. The bottom line also declined over 2% on a year-over-year basis. A 9.9% rise in rent and purchased transportation costs led to the below-par bottom-line performance in the quarter. Let’s see how things are shaping up for this announcement.

Factors at Play this Quarter

J.B. Hunt’s weak balance sheet and the impact of lower fuel surcharge are likely to adversely impact its results in the fourth quarter. Adding to the woes, U.S. truckload volumes have been declining. Apart from declining demand, elevated costs are likely to hurt results in the final quarter of 2016.

Also, J.B. Hunt faces stiff competition from truckload carriers like YRC Worldwide Inc. YRCW and Old Dominion Freight Line ODFL. Thus, the quarterly earnings are likely to be impacted by intensifying competition.

However, the company’s strong product portfolio is encouraging. We are also impressed by the company’s efforts to reward shareholders through dividend payments and share repurchases. During the third quarter, the company repurchased approximately 922,000 shares for $74.8 million. We expect the company to continue with its investor-friendly measures in the fourth quarter.

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

Earnings Whispers

Our proven model does not conclusively show that J.B. Hunt is likely to beat the Zacks Consensus Estimate 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 at least 3 (Hold) for this to happen.

Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Most Accurate estimate stands at $1.00 while the Zacks Consensus Estimate is pegged at $1.01. Hence, the Earnings ESP is -0.99%. 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 #3.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

A Stock to Consider

Investors interested in the transportation space may consider United Continental Holdings UAL, which possesses the right combination of elements to post an earnings beat this quarter.

United Continental Holdings has an Earnings ESP of +6.67% and a Zacks Rank #2. The company, which will release its fourth-quarter results on Jan 17, has an impressive history with respect to earnings per share. The company beat the Zacks Consensus Estimate in three of the last four quarters with an average positive surprise of 1.68%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
 
Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report
 
YRC Worldwide, Inc. (YRCW): Free Stock Analysis Report
 
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
 
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