JB Hunt Transport Services Inc

J.B. Hunt Transport Services warned that third-quarter earnings could fall 5% to 10% quarter over quarter as record diesel prices, higher driver costs and rising claims hit at once, sending its shares down 13% on September 16 in the worst single day since the company went public in 1983. National diesel prices linked to the war in Iran hit a record $6.31 a gallon, up more than 70% year over year, with California prices already above $8, and finance chief Brad Delco called the swings some of the most radical and abnormal he has seen. The company expects about $25 million more in driver-related spending in the third quarter than in the second as it recruits and trains drivers, and it also faces higher claims as medical expenses rise, so falling diesel prices would remove only part of the pressure. J.B. Hunt's fuel surcharges and intermodal network are built for this kind of shock but adjust with a lag, and the company reported 10% intermodal volume growth and a 58% increase in intermodal operating income in the second quarter, partly tied to customers seeking relief from fuel costs. Hedge fund count in the stock fell to 43 in the second quarter of 2026 from 45 in the first, even as position value rose to $2.63 billion from $2.02 billion, while fellow carrier Knight-Swift saw its holder count grow to 69 from 53.

U.S. diesel prices climbed to $6.51 a gallon on Sunday, according to AAA, pushing transport stocks lower and sending fuel costs rippling through freight, food, and consumer goods markets, with the national average up more than 40 cents in the past week alone. J.B. Hunt Transport Services stock shed more than 13% last Wednesday after finance chief Brad Delco warned at a Morgan Stanley industry conference that the company's earnings would fall between 5% and 10% from the second to the third quarter due to fuel costs, describing the swings as some of the most radical and abnormal he had ever seen and noting record diesel costs were creating at least a $10 million headwind for the company. The Energy Information Administration put the national on-highway diesel average at $6.285 a gallon as of September 14, up 32 cents from the prior week and $2.55 higher than a year earlier, while California's statewide average stood at $8.039 a gallon and national prices have risen $2.759 over the past two years. The surge stems from two overlapping supply disruptions: conflict between the U.S. and Iran has restricted tanker traffic through the Strait of Hormuz, and Ukrainian drone strikes on Russian refining infrastructure have compounded those losses, with Moscow banning diesel exports. Mark Wolfe, executive director of the National Energy Assistance Directors Association, warned that households dependent on heating oil, concentrated in the Northeast, could face bills as much as 31% higher this winter if diesel prices hold at current levels, and Iowa Sen. Chuck Grassley called on President Donald Trump over the weekend to impose an embargo on U.S. diesel exports, an idea Senate Majority Leader John Thune said he was open to examining while Interior Secretary Doug Burgum expressed doubt it would lower prices.

Diesel prices have hit an all-time high of 644 and gasoline is about 10 cents off its May peak, raising the question of whether energy costs will start shocking company earnings. JB Hunt warned earlier this week that its bottom line is being hit by the swift rise in diesel prices, saying it expects a quarter-to-quarter profit decline of 5 to 10 percent because pricing cannot be adjusted quickly enough. PNC Asset Management Group CIO Amanda Agati said she does not expect energy costs to crack the trajectory of earnings growth, noting positive revisions coming into the end of the third quarter remain positive and largely broad-based. Agati said companies are scrambling to hedge in this environment and that margins have been impressive for years, but warned that if energy prices remain elevated a year from now, the story would be very different. The discussion comes as diesel sits just pennies away from an adjusted inflation record.

U.S. equities ground higher off six-week lows on Wednesday as a sharp reversal in crude oil handed stocks a reprieve just hours before the Federal Reserve is expected to raise interest rates for the first time since 2023. The S&P 500 added 0.4% to 7,615.70, the Dow Jones Industrial Average was effectively flat at 52,113, and the Nasdaq 100 outperformed with a 0.9% gain to 29,198. West Texas Intermediate crude slid 3.6% to $102.02 a barrel after U.S. Energy Secretary Chris Wright told CNBC that the outage on Saudi Arabia's damaged East-West crude pipeline would be a brief and temporary interruption measured in days, and Riyadh moved to route additional barrels through Oman. Markets price in roughly a 93% chance the central bank will lift the target range by 25 basis points to 3.75%-4.00% this afternoon, with another move expected by December, after August retail sales jumped 1.2% month-over-month against forecasts of 0.8%. On the earnings front, Forgent Power Solutions rallied 11.6% after fourth-quarter revenue rose 94% year-over-year to $462 million, while J.B. Hunt Transport Services collapsed 12.5% after guiding third-quarter earnings to fall 5% to 10% from the second quarter on a $10 million fuel headwind and $25 million of added driver-related costs.

J.B. Hunt Transport Services warned that near-term cost pressures are outpacing pricing gains, likely producing a 5% to 10% sequential decline in third-quarter EPS, sending shares down 12% in early Wednesday trading. Executives said late Tuesday at a Morgan Stanley investor conference that the midpoint of that range implies third-quarter EPS of $1.77, roughly 16% below the current $2.10 consensus estimate and roughly in line with the 2025 third quarter. The company flagged $25 million in incremental driver-related costs for recruiting and bonuses, plus at least a $10-million sequential fuel headwind, as diesel prices rose 10% sequentially from July to August and climbed in eight of the 11 weeks of the quarter. J.B. Hunt said the cost inflation is more cyclical than structural and that higher driver costs signal a strong freight market, noting that 96% of its operating income comes from its intermodal and dedicated units, which are slow to capture rate inflections. Its intermodal bid season starts in October, with roughly 10% of contracts renewing in the fourth quarter, and management sees a big opportunity to close the gap between intermodal's current 32% discount to truck and the typical 10% to 15% discount in the East, though it will not implement out-of-cycle rate hikes.

SK Hynix is in talks with Intel about a deal that would see the South Korean memory chip maker manufacture memory chips in the US for the first time, according to a Reuters report. SK Hynix responded that it is exploring options to boost its global competitiveness but said no deal has been made with Intel. Intel shares rose about 4% in premarket trading, making it the most actively traded stock, as Commerce Secretary Howard Lutnick has urged SK Hynix and other Asian chipmakers to start making chips in the US to help address the global shortage. Separately, JB Hunt shares slid 11% after the trucking company flagged rising costs and issued a rare earnings warning at a Morgan Stanley conference, saying it expects second quarter to third quarter earnings to drop 5 to 10% and that higher costs from ramped-up hiring, bigger signing bonuses and raises will cost it $25 million more in the third quarter than in the second quarter. Brookfield Capital agreed to buy Australian plumbing products company Reliance Worldwide in a deal valuing the company at $2.8 billion, or $3.38 a share.

Cass Information Systems reported that its truckload linehaul index, which excludes fuel and accessorial surcharges, rose 5.5% year over year in June, marking the 18th consecutive month of annual increases. The broader expenditures index, measuring total freight spend, surged 11.2% year over year, driven by higher rates and a 40% jump in retail diesel fuel prices. However, the shipments component of the Cass Freight Index fell 4.1% year over year, accelerating from a 1.2% decline in May, and slid 3.1% sequentially. The report noted that tighter supply remains the main reason for accelerating rates, while a demand recovery may be delayed by inflation and a low U.S. savings rate.

Morgan Stanley downgraded its view on the North American freight transportation sector to In-Line from Attractive, arguing that much of the cyclical recovery upside is already reflected in stock prices at record valuations. The brokerage raised earnings estimates and price targets for most companies under coverage, citing tightening trucking capacity, improving pricing, and recovering demand, but warned that the debate has shifted to how high earnings can climb and whether gains are sustainable. Key freight indicators have reached record levels, yet demand remains less certain than supply, and the firm believes the industry is only in the early stages of a demand recovery. Transportation stocks have climbed roughly 50% since late 2025, pushing valuations to all-time highs and reducing the margin for further gains. Morgan Stanley downgraded Old Dominion Freight Line to Equal-weight from Overweight, J.B. Hunt Transport Services to Underweight from Equal-weight, and Landstar System to Underweight, while continuing to favor truckload carriers, selected less-than-truckload operators, and Canadian railroads.

ArcBest currently holds a Zacks Rank of #1 (Strong Buy) and a Value grade of B, making it the superior value opportunity over JB Hunt, which carries a Zacks Rank of #2 (Buy) and a Value grade of D. ArcBest trades at a forward P/E of 24.72, a PEG ratio of 0.66, and a P/B of 2.51, while JB Hunt has a forward P/E of 37.03, a PEG ratio of 2.00, and a P/B of 7.06. The stronger earnings outlook and more attractive valuation metrics support ArcBest as the better choice for value investors.

A financial analysis by Demotech, Inc. finds that combined net profits of the ten largest U.S. trucking companies by market capitalization dropped from 4.2 billion dollars in 2021 to 2.2 billion dollars in 2025, a decline of approximately 46.9 percent. The study examined SEC filings for Old Dominion Freight Line, JB Hunt Transport Services, XPO Logistics, Saia, Knight-Swift Transportation Holdings, RXO, Schneider National, ArcBest, Werner Enterprises, and Heartland Express. While aggregate revenues rose modestly over the period, total operating expenses grew faster, and insurance and claims costs surged 54.4 percent from 992 million dollars to 1.53 billion dollars, far outpacing both revenue and expense growth. Three of the ten companies posted a net loss in 2025, compared to none in 2021, indicating that escalating insurance costs are a key factor eroding profitability in the industry.