J.B. Hunt Shares Fall 13% After Warning of Q3 Earnings Drop

Shares of J.B. Hunt plunged 13% on Wednesday after the trucking company said it expects its earnings to drop in the third quarter.

"We kind of want to be transparent with investors and give an update that in light of these costs that are sort of hitting us, we are expecting our Q2 to Q3 earnings to actually drop 5% to 10%," Chief Financial Officer Brad Delco said at the Morgan Stanley Industrials conference.

Delco said between recruiting, advertising, onboarding, training and sign-on bonuses, the company expects to see about $25 million more in the third-quarter costs compared with the second quarter. He said that means J.B. Hunt is "preparing for growth."

Still, he added the company has also seen "some of the most radical and abnormal swings" in fuel prices that it has ever seen and record-high diesel prices, which are causing at least a $10 million headwind.

Delco said he expects volumes to improve sequentially to offset the incremental pressures.

"It really is more of a timing issue," he said. "I think you can look at a glass half-empty or a glass half-full. I'm really glad that we have visibility to these costs right now."

Delco also said J.B. Hunt is working on repairing its margins, though he believes the company still has a long way to go.

J.B. Hunt stock has risen nearly 100% over the past year.