Before market open on Tuesday, transportation company J.B. Hunt (JBHT -0.59%) and real estate investment trust JBG SMITH Properties (JBGS -0.53%) were trading lower. The two companies' moves follow news posted after market hours yesterday. J.B. Hunt's volatility follows the company's first-quarter update and JBG SMITH's comes after the company announced an equity rise.
Here's a look at each of these stories.
Shares of J.B. Hunt were down nearly 4% in pre-market hours trading as of 9:00 a.m. EDT, following the company's first-quarter earnings release.
The transportation specialist reported first-quarter revenue of $2.09 billion, up 7% year over year. Earnings per share for the period was $1.09, up from $1.07 in the year-ago quarter. The results were meaningfully behind what analysts were expecting. On average, analysts expected revenue and earnings per share of $2.21 billion and $1.26, respectively.
Operating income notably declined during the quarter. This decrease, combined with the company's worse than-expected-revenue, helps explain why earnings per share fell short of expectations. Operating income was $168 million, down from $169 million in the year-ago quarter. Some factors negatively impacting operating income were "increased rail purchased transportation costs; lower intermodal network utilization; lower productivity in winter weather affected regions; higher driver and non-driver salaries, wages and benefits;" and more, management said in J.B. Hunt's first-quarter earnings release.
The company also noted that net interest expense was up 43% year over year "due to increased debt levels and higher effective interest rates on our debt."
JBG SMITH Properties
Real estate investment trust (REIT) JBG SMITH Properties, which owns operates, and invests in office, multifamily, and retail real estate in the Washington, DC area, announced an equity raise on Monday afternoon. The company said it wanted to raise capital with an underwritten public offering of nine million common shares, including a 30-day option for underwriters to purchase up to 1.35 million more shares.
"The Company intends to use the net proceeds from the offering to fund development opportunities and for general corporate purposes, which may include paying down indebtedness," management said in a press release on Monday.
In the company's fourth-quarter earnings release in February, management said it ended 2018 with $2.1 billion of debt, or $2.4 billion when including the company's share of unconsolidated real estate ventures. The weighted average interest rate on this debt was 4.23% -- and 73% of this debt was fixed-rate debt.
As of 9:00 a.m. EDT, JBG SMITH stock was down nearly 2% in pre-market hours.