Intermodal Trucking Giant JB Hunt Stock Crashes on De-globalization
Number two U.S. trucking firm JB Hunt Transport Services (JBHT.O) dramatically missed Wall Street first-quarter earnings estimates on Tuesday morning, causing the stock to crash by more than 10%.
The transportation company's first-quarter earnings per share came in at $1.22, about 20% below the Wall Street consensus estimate of $1.53. The latest report caps a series of surprisingly bad news that has seen J B Hunt shares plunge by $7.7 billion, or 29%, from its’ high price earlier this year as the high growth container rail and trucking business has gone from boom to bust.
J.B. Hunt's multi-mode container business experienced flat unit growth and suffered and its pricing suffered a 370 basis point margin decline. Given that transportation company performance is seen as an indicator of future domestic activity, J B Hunt’s performance is seen as a harbinger of rising competitive pressures and a potential withering of the freight cycle.
J B Hunt CEO John Roberts on the company's earnings conference call stated: “The current environment we are in has remained persistently challenging and for longer than we had predicted.” Roberts added that the company’s financial performance in the quarter.
After a three day rout due to rising interest rates, the Dow Jones Index opened up by 200 points with the so-called Magnificent 7 (Mag7) tech stock all bursting higher on the opening. But the J B Hunt horror show sent the DJIA index down by 300 points.
In foreign exchange trading, the value of the US dollar fell for the first time in six sessions. The yield on the 10-year US Treasury bond the sets home mortgage rates traded around 4.645%, just 3bps from the its 2024 high hit yesterday. The 30-year mortgage rate that began the day at 7.96%, seems destined to move over 8% this week.