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.
JB Hunt Transport Services IncWarned Q3 EPS will fall 5-10% sequentially, ~16% below consensus, on $25M driver costs and $10M+ fuel headwind.
CTO Realty Growth Inc
Morgan Stanley