Shares of trucking and logistics company J.B. Hunt (JBHT 22.20%) were moving higher today after the company reported better-than-expected results in the third quarter.
Despite a challenging freight environment and flat revenue, the company was able to grow profits due to structural cost-cutting.
As a result, the stock was up 18% as of 10:42 a.m. ET.
Image source: J.B. Hunt.
J.B. Hunt picks up speed
J.B. Hunt reported third-quarter revenue of $3.05 billion, which was down slightly from $3.07 billion in the quarter a year ago, but beat estimates at $3.02 billion.
Like its peers, J.B. Hunt is dealing with an ongoing freight recession due to weakness in the manufacturing sector, and tariffs have added to the headwinds. Load volume fell 8% in its integrated capacity solutions segment, a sign of those headwinds, though productivity improved.
Despite those challenges, operating income rose 8% to $242.7 million, which the company credited to "structural cost removal" as part of its ongoing efforts to reduce costs. Operating income rose 12% in intermodal and 9% in dedicated contract services, its two biggest segments.
On the bottom line, earnings per share rose 18% to $1.76, which was well ahead of the consensus at $1.46.
CEO Shelley Simpson said, "I remain confident in our long-term strategy focused on operational excellence with our customers, safety performance, and execution on the efforts to lower our cost to serve."
What's next for J.B. Hunt?
The transportation company didn't provide guidance for the fourth quarter, but the cost cuts should continue to pay off even as uncertainty remains in the industry.
Investors are hopeful that the industrial economy and the freight industry will return to growth over the next year.
