J.B. Hunt shares fall after company warns of 5%-10% Q3 profit decline

• J.B. Hunt Transport Services warned third-quarter profit could decline 5% to 10% sequentially.
• Shares fell 11% after the company cited higher transportation and labor costs.
• The company expects increased driver hiring and fuel expenses in the quarter.

J.B. Hunt Transport Services (NASDAQ:JBHT) shares fell 11% after the company warned that third-quarter profit could decline 5% to 10% sequentially due to higher transportation costs.

The company said rising diesel prices, driver pay rates, and other expenses ahead of the holiday shipping season have increased operating costs across its business.

The company expects about $25 million in additional driver-hiring costs during the third quarter compared with the second quarter, while fuel costs are expected to increase by at least $10 million.

J.B. Hunt generates about 50% of its quarterly revenue from its intermodal segment, which combines multiple transportation methods such as rail and trucking.

The company has faced pressure from a delay in intermodal pricing adjustments catching up with higher operating expenses.

The broader trucking industry has also dealt with higher fuel costs, driver shortages, and increased labor expenses affecting transportation companies.