From CNBC · Laya Neelakandan · · 1m 20s
J.B. Hunt stock crashes 13% on profit warning
The trucking giant warned investors that third-quarter earnings will drop up to 10% due to rising costs and volatile fuel prices.
In brief
The trucking giant warned investors that third-quarter earnings will drop up to 10% due to rising costs and volatile fuel prices. J.B. Hunt expects Q3 earnings to fall 5-10% due to $25M in growth-related costs and $10M+ in fuel price headwinds. Originally reported by CNBC.
Stock plummets on profit warning
J.B. Hunt shares dropped 13% Wednesday after the company warned earnings will fall 5% to 10% in the third quarter.
CFO reveals the bad news
Chief Financial Officer Brad Delco told investors at a Morgan Stanley conference the company wants to be transparent about costs hitting the business.
“We kind of want to be transparent with investors and give an update that in light of these costs that are sort of hitting us”
Growth investments cost $25 million
The company expects $25 million more in third-quarter costs for recruiting, advertising, training and sign-on bonuses compared to the second quarter.
Fuel prices create $10M headwind
J.B. Hunt has seen record-high diesel prices and what the CFO called the most radical fuel price swings the company has ever experienced.
“some of the most radical and abnormal swings”
CFO sees timing issue, not crisis
Delco expects volumes to improve and offset the pressures. He said he's glad the company has visibility to these costs now.
“It really is more of a timing issue”
Stock still up 100% yearly
Despite the warning and Wednesday's drop, J.B. Hunt shares have nearly doubled over the past year.
The main idea
J.B. Hunt expects Q3 earnings to fall 5-10% due to $25M in growth-related costs and $10M+ in fuel price headwinds.
