J B Hunt reported second quarter net earnings of $54.6 million on total operating revenue of $759 million, up from profits of $45.6 million on total revenue of $679 million in the second quarter of 2004.
The increase, however, was fueled by intermodal and dedicated operations. Truckload revenue increased just 1% in the second quarter of 2005, compared to 7% and 12% increases in revenue from its intermodal and dedicated operations, respectively, according to Kirk Thompson, president & CEO.
The company has pulled 141 tractors away from its truckload segment and realigned them with the more profitable intermodal and dedicated segments. The company now has 5,394 tractors in its truckload operation, 141 fewer than in the second quarter of 2004. By contrast, its intermodal operation has 1,234 tractors, (up 69), and dedicated service has 4,969, up 63.
Hunt’s truckload segment suffered a higher operating ratio to from 87.5% in the second quarter of 2004 to 89% this year. However, profitability improved in the carriers intermodal and dedicated segments to ratios of 87.5% and 87.1%, respectively. In the dedicated segment, the operating ratio improved a whopping 3.4% while intermodal enjoyed a 0.4% gain.
For the intermodal segment, beefing up trucks and operating ratios translates to an operating income of $27.0 million— a 52% jump over the same period last year. The intermodal segment saw operating income ramp up 21% to $38.5 million. The truckload segment slid 7% to $27.1 million.
“While the general freight economy slowed in the second quarter from its robust pace of 2004, there appears to be no indication that freight demand is headed into a significant downturn,” Thompson said.