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J.B. Hunt (JBHT) Q3 Earnings: Disappointment in Store?


J.B. Hunt Transport Services Inc. JBHT is set to release third-quarter 2016 results, before the market opens on Oct 17.

In the last quarter, the company posted a negative earnings surprise of 4.17%. 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 might affect its top line. Adding to the woes, U.S. truckload volumes have been declining.

Also, J.B. Hunt faces stiff competition from truckload carriers like YRC Worldwide Inc. YRCW, Old Dominion Freight Line ODFL and Conway Inc. Thus, the quarterly earnings are likely to be impacted by intensifying competition. In fact, such unfavorable macroeconomic developments induced the company to lower its revenue growth guidance for 2016 to 7% instead of 9%-12% over 2015 levels expected earlier.

However, the company’s strong product portfolio is encouraging. We are positive on the growth potential of J.B. Hunt’s asset light transportation model. The company’s shareholder returns policy too continues to impress.

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 $1.01 while the Zacks Consensus Estimate is poised at $1.02. Hence, the Earnings ESP is -0.98%.

Zacks Rank: J.B. Hunt carries a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 and 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

HUNT (JB) TRANS Price and EPS Surprise

HUNT (JB) TRANS Price and EPS Surprise | HUNT (JB) TRANS Quote

Stock to Consider

Here is a transportation stock you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.

Genesee and Wyoming Inc. GWR has an Earnings ESP of +4.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is scheduled to report quarterly earnings on Nov 4.

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