J.B. Hunt misses estimates on weak freight demand and higher maintenance expenses

(Reuters) – J.B. Hunt Transport Services Inc reported lower-than-expected quarterly earnings on Monday, hurt by weak shipping demand, high driver wages and maintenance expenses.

Shares of trucking operator fell 2.43% to $172.36 in extended trading.

Logistics firms are struggling with excess delivery capacity as demand from e-commerce companies declines from pandemic highs.

Volumes at J.B. Hunts intermodal business fell 5%.

The U.S. trucking companies have also been forced to pay higher wages for drivers as they deal with a shortage in the industry.

Major players in the global transportation industry, which was ravaged by supply chain disruptions and port logjams last year, have begun to pursue high-margin customers to help their businesses stay afloat in a rapidly changing economy.

Delivery giants such as FedEx and United Parcel Service have instituted cost control measures to better equip themselves in an unpredictable economy.

Lowell, Arkansas-based J.B. Hunt managed to cut its operating expenses by roughly 6% to $2.95 billion in the first quarter.

The company reported a profit of $1.89 per share for the quarter through March, compared with analysts average estimate of $2 per share, as per Refinitiv data.

Its revenue also declined 7.4% to $3.23 billion, short of analysts average estimate of $3.40 billion.

(Reporting by Priyamvada C and Pratyush Thakur in Bengaluru; Editing by Shweta Agarwal)