JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q2 2019 Earnings Conference Call - Final Transcript
Jul 15, 2019 • 05:00 pm ET
Ladies and gentlemen, welcome, and thank you for joining today's teleconference, the 2019 Q2 Earnings Call. Please note that all lines will be muted until the Q&A portion of the call. We will provide you with instructions on how you can ask a question at that time.
With that, I'll turn the call over to David Mee, Chief Financial Officer. David, please go ahead.
David G. Mee
Thank you. Good afternoon, everyone, and thank you for joining us. I have with me this afternoon, John Roberts, our CEO; Terry Matthews, the President of Intermodal; Nick Hobbs, the President of DCS; Shelley Simpson, the Chief Commercial Officer and President of Highway Services; John Kuhlow , our Chief Accounting Officer and the worst-kept secret in Investor Relations Community, Brad Delco, our Vice President of Investor Relations.
As far as, call goes, same ground rules as before. Let me start with the two to three minutes synopsis of our view of the quarter, and then, we'll open up the lines for questions. If you don't mind, please limit yourself to one question and one follow-up, so we can get through this with everybody getting an opportunity to ask a question if they'd like. Appreciate it.
Overall, we felt like there was some positives in an otherwise weak freight environment. We saw our cost inflation becoming more normalized and the bid season pricing is performing largely as we expected, but the range of pricing from beginning to end is wider than what we had originally anticipated.
We expect asset-based pricing in truck and Intermodal to be positive, though, the year-over-year increases are ending the season in the low single digits. And private fleet outsourcing interest has not subsided, because Dedicated's pipeline remains very, very strong.
Specifically in Intermodal, we were disappointed with the low accounts for the quarter, but we saw visible signs that the seasonality of freight flows has not completely disappeared, as our loads per workday improved throughout the quarter.
Our Eastern network loads were down 11%, but we knew we could start off in the whole 9%, due to the lane closures alone.
Customer award compliance remained around 7%, [Phonetic] which is about 10 percentage points to 15 percentage points below historical levels. However, our load count increased sequentially from Q1 and that additional throughput did allow us to see a modest improvement in our profitability.
DCS had a strong quarter, kind of [Phonetic] simple. The base business, which we define as anything that non-Final Mile, operated as expected both from a revenue and a profitability perspective. The Final Mile business continues to improve its profitability excluding the charge for the -- for the accident settlement, and it continues to meet its EBITDA targets and did for the quarter.
In ICS, while the print [Phonetic]for the quarter was disappointing, w were encouraged with the top line result. We lost or eliminated [Phonetic] some LTL business compared to a year ago, but we're able to offset some of the effect with growth in dry van sector.