J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) Q4 2022 Earnings Call Transcript

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Nick Hobbs: Yes. So, as we look back at Q4, we felt some pressure, I would say, modest, not a lot, but there were some accounts that were given early signals of reduction and we did reduce just a handful of fleets at this point. The primary thing I would say that we addressed was really we’ve been carrying a lot of older trucks and so we’re starting to pick up a few more new trucks and making some headway in reducing that. So, that was the primary, but there was some fleet reduction. Then we’re going to stick with our guidance on what we’ve said on sales in the 800 to 1,000 range. Our pipeline is still full. We feel good. We are experiencing what I would call just some hesitation from deals that are in there that the customers trying to figure out what’s going to happen in the first part of the year, but we are still signing deals.

So, we, yes, 1,000 to 1,200 correction, not 800 to 1,000, so 1,000 to 1,200 that we would sell. Also, we have 500 trucks already sold that we will be adding as we get the equipment available. So, we have some momentum on that side.

Operator: Our next question comes from Amit Mehrotra from Deutsche Bank. Your line is open.

Amit Mehrotra: Thanks, operator. Hi, everyone. Darren, I just wanted to ask about how do you think cost can trend in the intermodal business as yield continue to moderate? I’m just trying to understand if you think there’s enough cost and efficiency opportunity to offset more pressure on the revenue side from yield? And then John Kuhlow, I just wanted to ask about 8.8 million bonus payment. That’s great to see for the whole team. Just wondering if you can talk about, is it pro-rata across segments or is there one segment that’s taking the lion’s share of that? Thanks.

Darren Field: So, I’ll start Amit. Appreciate the question. I think that we have long said that there’s real cost to exit our system in the form of velocity and improvements in driver productivity. Box turns gets most of the focus because it’s an easy metric to see and calculate. Our driver productivity is a significant element inside our cost that can also improve as we grow our volumes and get more normalized into our system. Our customers are beginning to unload our equipment faster. The railroads are operating faster, all of which creates some cost takeout. So, as we grow our business, we really feel strongly that we can overcome any, kind of pricing pressure. We’re not looking for any, kind of change to our long-term margin guidance and feel confident that we can deliver in that area in 2023 for sure. We said, we expected to grow volume, expect to grow revenue and expect to grow earnings in 2023. Kuhlow?

John Kuhlow: Hey, Amit. It feels like a second question, but it’s a good topic, so we’ll grant it to you. On the appreciation bonus, that was for all frontline employees. That’s predominantly drivers, but also includes technicians and then some of our office. So, it’s primarily in the JBI and the dedicated segments. That’s where we have most of our drivers. I’ll give you of the was in Intermodal and Dedicated was another 5 million and the rest is spread throughout the other segments.

Operator: We’ll now turn to Ravi Shanker from Morgan Stanley. Your line is open.

Ravi Shanker: Thank you. Good morning, everyone. Maybe an ICS question. I think you guys were very clear in the 3Q to 4Q walk not playing out as expected because of the lack of peak season. How do we think about that going to 2023? What’s the walk looking like? Is that demand weakness continuing or do you not see as much of a step down sequentially into 1Q?

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