JBHT

For questions about this article or underlying research, email [email protected]. Shares of CSX (CSX) rose 6.8% on October 22, 2026, the day after the company released its fiscal Q3 2026 report, while the S&P 500 fell 1.2%. The railroad posted $4.02 billion in revenue, coming in barely above the $4.0 billion consensus estimate. That figure marked a 12% increase from a year earlier, and management raised its full-year sales outlook. Fuel surcharges drove a portion of this increase. So how much of that growth came from hauling more freight? Half Of CSX's Growth Came From Freight And Prices Management said fuel accounted for about half of the revenue growth in fiscal Q3 2026, as average diesel prices ran nearly 50% higher than a year earlier. The other half came from the railroad's own operations: CSX moved 5% more freight, and the CFO cited pricing gains in its merchandise, intermodal and coal markets. The intermodal business illustrates both factors simultaneously. Volume in the segment climbed 7% to an all-time record, yet management said essentially all of the rise in revenue per unit came from fuel surcharges. Management still raised its outlook and now expects full-year revenue growth in the high single digits, up from its previous forecast of the mid to high single digit range. This projection covers total revenue, including fuel. In fiscal Q3 2026, about half of that growth came from diesel prices, which CSX does not set. CSX's Operating Margin Has Widened Each Quarter In 2026 The margin offers a firmer picture. CSX posted an operating margin of 36.0% in fiscal Q1 2026 and 38.3% in fiscal Q2. The metric reached 39.1% in fiscal Q3, compared with 34.9% a year earlier excluding a $164 million goodwill charge. Management said the railroad handled the extra volume while reducing nonfuel costs by 3%. Not every expense declined: higher incentive pay and inflation added over $90 million to labor costs, which were mostly offset by better workforce productivity and the absence of last year's severance costs. CSX controls these operational elements, which is why the margin forms the firmer half of the case for the stock. What CSX Management Expects For Fiscal Q4 2026 Management said it is confident of widening the full-year operating margin by more than 350 basis points in 2026. The company also anticipates the usual fourth-quarter step up in expenses as winter arrives, and said that a service agreement that added new business in the fall of 2025 no longer contributes to year-over-year growth. During the October 21 call, management attributed only about half of the growth to fuel. When asked how much extra revenue the surcharges newly added on tariff traffic generated during fiscal Q3 2026, management said it would not provide a precise number. The stock's rise outpaced other railroads on October 22, with Union Pacific up 3.6% and Norfolk Southern up 3.1%. Following the jump, CSX traded at 26.7 times its trailing earnings at that day's close, against 23.0 for the S&P 500. CSX's margin widened as the company cut nonfuel costs, but about half of its revenue growth came from diesel. For the 6.8% jump to last, more of that growth has to come from freight rather than fuel. CSX is expected to report its fiscal Q4 2026 results in January 2027, and its volume growth from a year earlier is the figure to watch. Your Advisor Retired? Get A Second Opinion Before You Settle One report just changed how CSX looks to the people who own it. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Our partner advisory firm offers a free review of your holdings, fees and income plan. Get A Free Second Opinion Spot an error or want more like this? Tell us in 10 seconds.

CSX Corporation (CSX) reported third-quarter 2026 earnings of 57 cents per share, surpassing the Zacks Consensus Estimate of 52 cents by 9.6%. Earnings increased 29.5% year over year from the prior-year adjusted figure of 44 cents per share, which excluded a goodwill impairment charge. Total revenues increased 12% year over year to $4.02 billion, beating the Zacks Consensus Estimate of $3.95 billion by 1.7%. Higher fuel surcharge revenues, volume growth and improved pricing across merchandise, intermodal and coal supported the top line. Total volumes increased 5% year over year. CSX Corporation price-consensus-eps-surprise-chart | CSX Corporation Quote Merchandise revenues increased 11% year over year to $2.45 billion. Merchandise volumes rose 3% year over year, while revenues per unit improved 8% to $3,613. Higher fuel surcharges and favorable contract renewals contributed to revenue growth. Chemicals revenues increased 13% year over year to $790 million, supported by higher shipments of petcoke, waste, plastics and crude oil. Agricultural and food products revenues also rose 13% year over year to $430 million, benefiting from increased grain and feed ingredient shipments. Metals and equipment revenues surged 19% year over year to $267 million, driven by higher steel, equipment and aluminum shipments. Forest products revenues advanced 12% year over year to $277 million, while automotive revenues improved 6% despite lower shipments. Fertilizer revenues declined 6% year over year to $118 million due to weaker demand. Intermodal revenues increased 20% year over year to $634 million. Segment volumes advanced 7% to 820,000 units, while revenues per unit grew 13% year over year to $773. Domestic intermodal shipments benefited from customer wins, new service offerings and tightening trucking capacity. Higher fuel prices also supported revenues per unit, partially offsetting a slight decline in international shipments. Coal revenues increased 10% year over year to $537 million. Volumes improved 2% year over year to 188,000 units, while revenues per unit rose 7% to $2,856. Higher export shipments of metallurgical and thermal coal, supported by production from reopened mines, helped offset softer domestic utility demand. Trucking revenues increased 10% year over year to $227 million, while other revenues grew 7% to $166 million. Total operating expenses declined 2% year over year to $2.45 billion. The reduction reflected the absence of a $164 million goodwill impairment charge recorded in the prior-year quarter, along with operating cost savings. Fuel expenses surged 60.5% year over year to $451 million as locomotive fuel prices increased 67% to $4.24 per gallon. Lower fuel consumption and improved efficiency partially offset the impact of higher prices. Labor and fringe expenses increased 2% year over year to $834 million, driven by higher incentive compensation and wage inflation. Purchased services and other expenses declined 10% to $657 million, benefiting from efficiency initiatives and lower network disruption-related costs. Depreciation and amortization expenses fell 3% year over year to $413 million, while equipment and other rents increased 7% to $92 million. Operating income increased 44.4% year over year to $1.57 billion. Compared with the prior-year adjusted operating income of $1.25 billion, the increase was 25.5%. Operating margin expanded to 39.1% from the prior-year adjusted margin of 34.9%, representing an improvement of 420 basis points. Net earnings increased 51.6% to $1.05 billion from reported net earnings of $694 million a year earlier. Excluding the prior-year impairment, net earnings improved 28.6% from $818 million. The Federal Railroad Administration personal injury frequency index improved 17% to 0.97, while the train accident rate declined 5% to 2.77. Fuel efficiency improved 2% to 0.92 gallons per 1,000 gross ton-miles. However, average train velocity declined 2% to 18.6 miles per hour, while dwell time increased 12% to 10.6 hours. Carload trip plan performance decreased to 73% from 83%, reflecting continued service challenges. Net cash provided by operating activities totaled $4.22 billion during the first nine months of 2026, compared with $3.23 billion in the year-ago period. Free cash flow before dividends increased to $2.65 billion from $1.07 billion. CSX exited September with cash and cash equivalents of $1.22 billion, compared with $670 million at year-end 2025. Long-term debt stood at $17.1 billion, compared with $18.17 billion at year-end. The company repurchased $1.06 billion of shares and paid $779 million in dividends during the first nine months. For full-year 2026, CSX expects high-single-digit revenue growth. Operating margin expansion is anticipated to exceed 350 basis points. Management expects free cash flow growth of more than 80%, while total capital expenditures are projected to remain below $2.4 billion. CSX has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses. Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, by 15%, while premium and diversified revenue streams continued to expand. J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%. Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability. United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth. Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CSX Corporation (CSX) : Free Stock Analysis Report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Union Pacific Corporation UNP reported impressive third-quarter 2026 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. Strong volume growth, core pricing gains and higher fuel surcharge revenues contributed to the results. Quarterly adjusted earnings (excluding 4 cents from acquisition-related expenses) of $3.53 per share beat the Zacks Consensus Estimate of $3.47 by 1.7% and increased 14.6% year over year. Operating revenues of $7.20 billion surpassed the consensus estimate of $7.12 billion by 1.1% and rose 15.3% year over year. Revenue carloads increased 6% year over year. Union Pacific Corporation price-consensus-eps-surprise-chart | Union Pacific Corporation Quote Freight revenues (accounting for approximately 95% of the top line) increased 14.9% year over year to $6.81 billion. Freight revenues excluding fuel surcharge increased 6% year over year to $5.64 billion. Fuel surcharge revenues surged to $1.17 billion from $602 million in the year-ago quarter. Other revenues increased 21.1% year over year to $384 million. Total revenue carloads reached 2.29 million compared with 2.16 million in the prior-year quarter. Average revenue per car increased 8% year over year to $2,971, reflecting improved revenue generation per shipment. Operating income increased 15.5% year over year to $2.94 billion. Total operating expenses increased 15.1% year over year to $4.25 billion, primarily due to higher fuel prices, inflation and volume-related expenses. Fuel expenses surged 68.8% year over year to $1.04 billion. Expenses on purchased services and materials increased 9.2% year over year to $746 million. Compensation and benefits expenses rose 4.1% to $1.26 billion, while depreciation expenses increased 4% to $643 million. Equipment and other rents declined 2.8% to $206 million. The operating ratio (operating expenses as a percentage of revenues) improved 10 basis points year over year to 59.1% on a reported basis. However, the adjusted operating ratio deteriorated 30 basis points year over year to 58.8%. Higher fuel prices negatively impacted the operating ratio by 140 basis points. Bulk freight revenues were $2.12 billion, up 9.6% year over year. Segmental revenue carloads remained nearly flat at 529,000. Grain and grain products revenues increased 11% to $1.09 billion, while coal and renewables revenues rose 12% to $525 million despite a 3% decline in carloads. Industrial freight revenues totaled $2.51 billion, up 14.4% year over year. Segmental revenue carloads increased 6% to 606,000. Metals and minerals revenues climbed 17% to $666 million, while energy and specialized markets revenues increased 18% to $771 million. Freight revenues in the Premium division were $2.19 billion, up 21.4% year over year. Premium revenue carloads increased 9% to 1.16 million. Intermodal revenues rose 27% to $1.52 billion, supported by an 11% increase in intermodal carloads. Automotive revenues grew 11% to $671 million. Freight car velocity improved 1% year over year to 228 daily miles per car. Average terminal dwell time declined 2% to 19.9 hours, reflecting improvements in terminal operations. Workforce productivity increased 5% to 1,219 car miles per employee. Train length increased 2% to 9,969 feet, while locomotive productivity remained flat at 140 gross ton-miles per horsepower-day. The fuel consumption rate improved 2% to 1.034 gallons per thousand gross ton-miles. However, intermodal and manifest service performance indexes declined six and seven percentage points, respectively. Union Pacific exited the third quarter of 2026 with cash and cash equivalents of $2.21 billion compared with $1.27 billion at the end of 2025. Long-term debt stood at $29.04 billion compared with $30.29 billion at 2025-end. During the first nine months of 2026, cash provided by operating activities increased to $8.30 billion from $7.07 billion in the corresponding year-ago period. Free cash flow rose to $2.36 billion from $1.86 billion. The company repaid $1.52 billion of debt during the period. For 2026, Union Pacific continues to expect reported earnings per share (EPS) growth in the high-single digits, consistent with its three-year compound annual growth rate target of high-single-digit to low-double-digit growth through 2027. UNP updated its capital investment plan to $3.5 billion. Currently, UNP carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum. Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%. Wabtec Corporation WAB reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion. J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%. Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Union Pacific Corporation (UNP) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report Wabtec (WAB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- J.B. Hunt Transport Services reported third quarter 2026 revenue of US$3,676.81 million and net income of US$172.42 million, with diluted EPS from continuing operations of US$1.82, alongside a regular quarterly dividend declaration of US$0.45 per share payable on November 20, 2026. - The transport group grew revenue faster than profit across both the third quarter and the first nine months of 2026, which points to margin pressure. Management continues to invest in people, technology and capacity, while also returning cash through dividends and share repurchases. - Investors may now consider how J.B. Hunt Transport Services' slower profit growth relative to revenue could influence its existing long term investment narrative. Scan how J.B. Hunt Transport Services stacks up against other freight and logistics players by reviewing a curated group of list of solid balance sheet and fundamentals (25 results) that may handle margin pressure differently. To own J.B. Hunt Transport Services, you need to be comfortable with a freight operator that is leaning heavily on intermodal growth, Dedicated contracts and cost efficiency programs to offset higher driver and fuel expenses. The latest quarter fits that story. Revenue moved ahead of profit, which keeps the focus on whether productivity tools and the AI freight execution platform can keep margins from slipping. In the near term, the key catalyst still sits in execution on volume and utilization, especially as intermodal and Dedicated bid cycles progress. The main risk remains that inflationary costs or ongoing legal overhang dilute operating income more than efficiency gains can offset. Recent earnings and guidance adjustments do not appear to remove that tension. They simply keep it in place. The fresh data point that matters most here is the third quarter and nine month 2026 earnings release. J.B. Hunt Transport Services reported quarterly revenue of US$3,676.81 million and net income of US$172.42 million, with diluted EPS from continuing operations of US$1.82. For the first nine months, revenue reached US$10,228.59 million and net income came in at US$495.01 million. Those figures sit against prior commentary about cost pressure in Dedicated and fuel. For a shareholder, the question is whether continued intermodal volume, contract backed Dedicated growth and the AI platform can keep earnings advancing even as margins feel tight. This update provides a clearer base to judge that execution against the existing risks and catalysts. Analysts currently frame J.B. Hunt Transport Services around projections for revenue of US$16.7b and earnings of US$1.1b by 2029. This implies 9.5% yearly revenue growth and an earnings increase of about US$425.5 million from current earnings of US$674.5 million. Uncover why J.B. Hunt Transport Services' fair value indicates a 23% potential upside to its current price, which could narrow quickly. Another angle focuses on capital deployment risk. The most cautious analysts worry that J.B. Hunt Transport Services could invest heavily into intermodal equipment and buybacks just as freight demand softens. Their January view assumed about 7.6% yearly revenue growth to roughly US$15.8b by 2029 and US$1.1b of earnings, which is far less upbeat than consensus. Those forecasts were set before the latest earnings and dividend decision, so you may want to compare both stories and decide which assumptions feel more realistic to you. Explore 3 other J.B. Hunt Transport Services fair value estimates, including one that suggests as much as 9% downside from the current price. Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your J.B. Hunt Transport Services research is our analysis highlighting 4 key rewards that could impact your investment decision. - See our latest analysis for J.B. Hunt Transport Services. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate J.B. Hunt Transport Services' overall financial health at a glance. If this update on J.B. Hunt Transport Services sharpened your thinking, you can broaden the opportunity set by comparing it with other businesses that match your risk, income and quality preferences using the Simply Wall St Screener. - For investors who want potential mispricings with solid fundamentals, scan a curated pool of 33 high quality undervalued stocks that may warrant a closer look beside J.B. Hunt Transport Services. - If resilience and balance sheet strength matter most to you, focus on a 31 resilient stocks with low risk scores and see how those profiles compare with the freight operator's risk mix. - Income focused readers can widen their watchlist with a 7 dividend fortresses that might complement or substitute a position in J.B. Hunt Transport Services. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include JBHT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Southwest Airlines Co. (LUV) reported third-quarter 2026 adjusted earnings of 66 cents per share, up 500% year over year and above the Zacks Consensus Estimate of 61 cents by 8.2%. Record operating revenues increased 21.2% year over year to $8.42 billion, beating the consensus mark of $8.27 billion by 1.9%. Strong demand for enhanced products and higher fares supported the top line despite elevated fuel costs. Revenue per available seat mile, or RASM, jumped 21.6% to an all-time high, while adjusted operating margin expanded 4.8 percentage points to 5.4%. Southwest Airlines Co. price-consensus-eps-surprise-chart | Southwest Airlines Co. Quote Passenger revenues increased 22.8% year over year to $7.75 billion, representing approximately 92.1% of total operating revenues. The increase reflected strong demand for Southwest's enhanced offerings and improved pricing. Freight revenues advanced 14.3% to $48 million, while other operating revenues rose 4.5% to $621 million. Managed business revenues reached a third-quarter record, with 20 of the company's 50 highest managed business booking days occurring during the quarter. Traffic, measured in revenue passenger miles, declined 0.4% year over year to 36.21 billion. Capacity, measured in available seat miles, decreased by the same percentage to 45.39 billion, keeping the consolidated load factor unchanged at 79.8%. Revenue passengers carried declined 3.2% year over year to 33.5 million. However, average passenger fare surged 26.9% to $231.69, while passenger revenue yield increased 23.3% to 21.41 cents. Passenger revenue per available seat mile improved 23.3% year over year to 17.08 cents. The strong pricing performance helped offset lower passenger volumes and supported record quarterly revenue generation. Total operating expenses increased 16.3% year over year to $8.04 billion. Aircraft fuel and related taxes surged 61.7% to $2.15 billion, representing an $821 million increase from the prior-year quarter. Average fuel cost increased 63.3% to $3.92 per gallon from $2.4, while fuel consumption declined 1.1%. Higher fuel expenses created a $1.08 per-share headwind to adjusted earnings. Salaries, wages and benefits increased 10% year over year to $3.54 billion, while landing fees and airport rentals climbed 13.7%. Maintenance expenses rose 1.3% year over year, partially offset by an 8.6% decline in other operating expenses. Cost per available seat mile excluding fuel, special items and profit sharing increased 3.8% year over year to 12.68 cents, reflecting continued discipline in controllable costs. Adjusted operating income surged to $452 million from $42 million a year earlier. On a reported basis, operating income rose to $379 million from $35 million, reflecting revenue growth that outpaced overall expense increases. Adjusted pretax income climbed to $428 million from $75 million. Adjusted net income increased to $328 million from $58 million in the prior-year quarter. Reported net income rose to $270 million from $54 million, while diluted earnings increased to 55 cents per share from 10 cents. Adjusted net margin expanded 3.1 percentage points to 3.9%. Southwest Airlines announced plans to introduce its first airport lounges under the Southwest Icon Lounge network, with initial openings expected in 2027. The airline also unveiled Rapid Rewards enhancements, including a new Platinum tier, additional redemption partners and expanded milestone benefits. Southwest Business introduced Business Priority and new distribution connectivity to improve corporate booking access. Fleet modernization continued with deliveries of 20 Boeing 737-8 aircraft and the retirement of 20 aircraft. Southwest Airlines ended September with 803 aircraft and continued installing Starlink Wi-Fi, targeting fleet-wide availability in fall 2027. Operating cash flow totaled $513 million in the third quarter compared with $287 million a year earlier. Capital expenditures reached $1.01 billion, primarily reflecting aircraft, technology and infrastructure investments. Southwest Airlines ended September with $5.6 billion in available liquidity, including $3.62 billion in cash and cash equivalents. Gross leverage stood at 1.9 times. The company distributed $176 million in dividends during the quarter and had $450 million remaining under its share repurchase authorization. For fourth-quarter 2026, Southwest Airlines expects adjusted earnings of 55-80 cents per share. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 90 ents per share. Capacity is projected to increase 3-4%, while unit revenues are forecast to grow 19-21% year over year. Non-fuel unit costs, excluding special items and profit sharing, are expected to rise 4-4.5%. Management assumes fuel costs of approximately $4.55 per gallon. For full-year 2026, Southwest projects adjusted earnings of $2.60-$2.85 per share and capacity growth of approximately 1.2%. Net capital spending is expected to be between $2.5 billion and $2.75 billion. Currently, LUV has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses. Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, 15%, while premium and diversified revenue streams continued to expand. J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%. Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability. United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth. Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Southwest Airlines Co. (LUV) : Free Stock Analysis Report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum. Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%. Revenue per available seat mile or RASM, rose 11.7%, supported by strong yields, premium demand and loyalty revenues. Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote Passenger revenues increased 13.5% year over year to $3.89 billion. Loyalty program other revenues rose 31.5% year over year to $263 million, while cargo and other revenues advanced 12.7% to $160 million. Premium revenues grew approximately 25% year over year, representing more than 36% of total revenues. Loyalty program cash remuneration increased 21% to $721 million, while managed corporate revenues jumped 30% year over year. Diversified revenues, representing revenues outside the main cabin, accounted for 54% of the company's total revenues. Consolidated traffic, measured in revenue passenger miles, remained essentially flat year over year, while capacity increased 2.4%. With capacity growth outpacing traffic, the consolidated load factor declined 2 percentage points to 82.8%. Passenger volumes decreased 1.1% year over year to 15.7 million. However, yield increased 13.4% to 18.73 cents, while passenger revenue per available seat mile rose 10.9% year over year to 15.52 cents. Revenue performance reflected improving pricing trends, with September yield increasing approximately 17% year over year. The gains came despite headwinds in Hawaii, investments in strategic growth markets and rapid international expansion. Total operating expenses increased 16.8% year over year to $4.23 billion, outpacing revenue growth. Aircraft fuel expenses rose 59.5% year over year to $1.21 billion as economic fuel cost climbed 57% to $3.94 per gallon from $2.51. Fuel consumption increased 1.7%. Wages and benefits rose 5% year over year to $1.29 billion, while landing fees and other rentals increased 9%. Aircraft maintenance expenses climbed 8% year over year, while selling expenses and food and beverage service costs each advanced 10%. Other operating expenses increased 16% year over year, further pressuring profitability. These increases more than offset a decline in special-item costs. Cost per available seat mile excluding fuel, freighter costs, performance-based pay and special items increased 4.4% to 11.46 cents from 10.98 cents a year ago. The increase was within management's prior expectation for low-to-mid-single-digit growth. Adjusted operating expenses, excluding these items, rose to $2.87 billion from $2.68 billion. Adjusted pretax income declined to $49 million from $173 million a year earlier. Adjusted pretax margin contracted to 1.1% from 4.6%. Adjusted net loss totaled $35 million compared to adjusted net income of $123 million in the prior-year quarter. On a reported basis, operating income declined 44.6% year over year to $82 million. GAAP net loss totaled $147 million or $1.32 per share compared to net income of $73 million or 62 cents per share, a year ago. A cumulative tax adjustment related to previously recognized first-half losses reduced third-quarter adjusted earnings by 67 cents per share. Operating cash flow totaled $149 million during the third quarter and $755 million for the first nine months of 2026. The company ended September with $3.3 billion in available liquidity. Cash and cash equivalents were $835 million, while marketable securities totaled $1.40 billion. Long-term debt and finance leases, including current maturities, reached $6.16 billion. Adjusted net debt to EBITDAR increased to 5.5 times from 2.9 times at year-end 2025, while debt to capitalization rose to 66% from 59%. For the fourth quarter of 2026, Alaska Air expects an adjusted loss of $2-$2.50 per share. Capacity is projected to increase 1-1.5%, with growth concentrated in international operations. Unit revenues are expected to rise in the low double digits, while non-fuel unit costs are projected to increase in the mid-single digits. The outlook assumes an economic fuel cost of $4.65-$4.85 per gallon. For full-year 2026, management anticipates an adjusted loss of $5-$5.50 per share, reflecting $1.8 billion in fuel expenses above its initial plan. Currently, ALK has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses. Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile or TRASM, 15%, while premium and diversified revenue streams continued to expand. J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%. Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability. United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth. Operating revenues rose 17.4% to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Union Pacific (NYSE:UNP) is scheduled to report its earnings on Thursday, October 22, 2026. The company has a market value of about $170.7 billion. Over the last twelve months it generated $25.4 billion in revenue and $10.2 billion in operating profit, with net income of $7.3 billion. Nobody knows how the market will take the numbers. What we can measure is how Union Pacific stock has reacted to its past earnings releases, which is useful context for anyone trading around the event. See the earnings reaction history of all stocks How Often Has Union Pacific Stock Risen After Earnings? Some observations on one-day (1D) post-earnings returns, measured from the last close before each release: - There are 19 earnings releases in the last five years, with 9 positive and 10 negative one-day (1D) returns. Positive 1D returns were seen 47% of the time. - Over the last three years that share falls to 45%, across 11 releases. - The median of the 9 positive 1D returns is 4.0%, and the median of the 10 negative ones is -2.1%. - The largest one-day reactions were 10.4% and -6.8%. The table below shows the 1D, 5-day (5D) and 21-day (21D) returns after each release, followed by summary statistics. Earnings Date | 1D | 5D | 21D 7/23/2026 | 4.0% | -0.1% | 3.9% 4/23/2026 | 8.8% | 6.2% | 6.4% 1/27/2026 | 0.7% | 1.9% | 14.4% 10/23/2025 | -2.3% | -3.9% | -1.8% 7/24/2025 | -4.5% | -2.5% | -2.5% 4/24/2025 | -2.0% | -1.9% | 1.4% 1/23/2025 | 5.2% | 5.8% | 4.1% 10/24/2024 | -4.4% | -3.8% | -1.0% 7/25/2024 | -0.9% | 3.9% | 2.9% 4/25/2024 | 5.0% | 1.3% | 0.3% 1/25/2024 | -0.3% | 0.7% | 6.0% 10/19/2023 | 2.1% | -0.3% | 6.5% 7/26/2023 | 10.4% | 7.4% | 3.5% 4/20/2023 | 0.3% | -5.2% | -1.6% 1/24/2023 | -3.3% | -4.7% | -8.9% 10/20/2022 | -6.8% | -2.1% | 4.9% 7/21/2022 | -1.2% | 2.5% | 12.8% 4/21/2022 | -1.1% | -4.2% | -12.4% 1/20/2022 | 1.1% | 2.3% | 4.8% Statistic | 1D | 5D | 21D # Positive | 9 | 9 | 13 # Negative | 10 | 10 | 6 Median Positive | 4.0% | 2.5% | 4.8% Median Negative | -2.1% | -3.1% | -2.1% Max Positive | 10.4% | 7.4% | 14.4% Max Negative | -6.8% | -5.2% | -12.4% Correlation Between 1D, 5D, And 21D Post-Earnings Returns Another approach is to wait for the initial reaction and ask whether it tends to continue. The table below shows the correlation between the 1D return and the return over the following 5 and 21 trading days, and between the 5D return and the following 21 trading days. A value near 1 means the first move has tended to continue; near -1, to reverse; near 0, no consistent pattern. The strongest relationship over five years is between the 1D and the following 5 days, at -0.48 across 19 releases: the early move has tended to partly reverse. That is a tendency, not a rule, and it can break on any given report. History | 1D vs next 5D | 1D vs next 21D | 5D vs next 21D 5 Years | -0.48 | -0.44 | -0.14 3 Years | -0.36 | -0.55 | -0.29 Does A Peer That Reports First Offer A Clue? JB Hunt Transport Services (JBHT) usually reports about a week before Union Pacific, and has already reported this season. Its stock fell 2.8% the day after its October 15 report. The table compares JBHT's one-day reaction to its own earnings with Union Pacific's one-day reaction to the report that followed. The correlation is -0.08, close to zero, so JBHT's reaction has not foreshadowed Union Pacific's in either direction. UNP Earnings Date | UNP 1D | JBHT 1D 7/23/2026 | 4.0% | 8.0% 4/23/2026 | 8.8% | 6.3% 1/27/2026 | 0.7% | -1.0% 10/23/2025 | -2.3% | 22.1% 7/24/2025 | -4.5% | 1.7% 4/24/2025 | -2.0% | -7.7% 1/23/2025 | 5.2% | -7.4% 10/24/2024 | -4.4% | 3.1% 7/25/2024 | -0.9% | -6.9% 4/25/2024 | 5.0% | -8.1% 1/25/2024 | -0.3% | 0.9% 10/19/2023 | 2.1% | -8.8% 7/26/2023 | 10.4% | 3.8% 4/20/2023 | 0.3% | -1.0% 1/24/2023 | -3.3% | 5.0% 10/20/2022 | -6.8% | 0.04% 7/21/2022 | -1.2% | -0.8% 4/21/2022 | -1.1% | 1.4% 1/20/2022 | 1.1% | 0.1% Correlation | - | -0.08 An earnings release can move one stock sharply in either direction. A diversified portfolio spreads that risk. The Trefis High Quality (HQ) Portfolio holds about 30 quality businesses, rebalanced with rules, and has a track record of outperforming a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000.

United Airlines Holdings, Inc. UAL reported third-quarter 2026 adjusted earnings of $2.54 per share, down 8.6% year over year and below the Zacks Consensus Estimate of $2.60 by 2.3%. Higher fuel expenses weighed on profitability despite strong revenue growth. Operating revenues rose 17.4% year over year to $17.88 billion but missed the consensus mark of $17.91 billion by 0.2%. A 15.9% increase in total revenue per available seat mile or TRASM, supported the top line, driven by strength across premium, loyalty and contracted business revenues. United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote Passenger revenues increased 17.6% year over year to $16.24 billion. Domestic passenger revenues advanced 19.9% year over year, while international passenger revenues rose 14.3%. Latin America revenues rose 24.2% year over year, Pacific revenues climbed 16.5% and Atlantic revenues improved 10.1% year over year. Within the Atlantic region, Europe revenues increased 13.3% year over year, partly offset by a 17.3% decline in the Middle East, India and Africa region. Cargo revenues jumped 22.9% year over year to $529 million, while other operating revenues grew 12.9% to $1.11 billion. Premium revenues rose 17% year over year, while Basic Economy and loyalty revenues increased 16% and 17%, respectively. Contracted business revenues advanced 26% year over year, reflecting resilient close-in demand. Economy cabin unit revenues improved 17% year over year. Consolidated passenger revenue per available seat mile increased 16.1% year over year, while passenger yield climbed 16.8%. Domestic PRASM advanced 14.5% year over year, while international PRASM grew 17.4%, reflecting strong revenue performance across the network. Traffic, measured in revenue passenger miles, increased 0.7% year over year, while capacity expanded 1.3%. As capacity growth outpaced traffic, the consolidated load factor declined 0.5 percentage points to 83.9%. United Airlines transported a record 49.5 million passengers, up 2.4% year over year from the prior-year period. Domestic load factor declined 0.9 points to 84.4%, while international load factor remained nearly unchanged at 83.2%. Operating expenses increased 18.8% year over year to $16.43 billion, outpacing revenue growth. Aircraft fuel expenses surged 61.6% year over year to $4.84 billion as the average fuel price increased 60.3% to $3.90 per gallon. Fuel consumption rose 0.8% year over year. Cost per available seat mile increased 17.3% year over year to 18.56 cents. CASM-ex, which excludes fuel, profit sharing, special items and third-party business expenses, rose 7.8% year over year to 13.09 cents. Salaries and related costs increased 8.9% year over year to $4.96 billion. Distribution expenses climbed 13.9% year over year, while landing fees and other rent rose 4.4%. Aircraft maintenance expenses increased 3.5% year over year. Adjusted operating income declined 6.9% year over year to $1.23 billion, while the adjusted operating margin contracted 1.8 percentage points to 6.9%. Adjusted pre-tax income fell 8.7% to $1.11 billion, with the adjusted pre-tax margin narrowing to 6.2% from 8%. Adjusted net income decreased 8.4% year over year to $833 million. On a reported basis, net income increased 8.5% year over year to $1.03 billion, while earnings rose to $3.14 per share from $2.90. The difference between reported and adjusted results reflected special credits, primarily associated with gains from aircraft sale-leaseback transactions. Operating cash flow totaled $465 million during the third quarter compared with $1.22 billion a year ago. Free cash flow was negative $1.84 billion compared with negative $153 million in the prior-year period. Adjusted capital expenditures totaled $2.19 billion, reflecting continued fleet and infrastructure investments. Available liquidity ended the quarter at $17.7 billion. Cash and cash equivalents totaled $6.65 billion, while short-term investments were $8.01 billion. Debt, finance lease obligations and other financial liabilities were $26.40 billion. Trailing-12-month net leverage stood at 2.4 times. United Airlines expects fourth-quarter 2026 adjusted earnings between 50 cents and $1.50 per share (Zacks Consensus Estimate of $1.75 lies above the guided range), assuming an all-in average fuel price of approximately $4.80 per gallon. Management expects fourth-quarter revenue growth to accelerate from the third quarter, exceeding 20% year over year. Unit revenue growth is also expected to accelerate, while unit cost growth excluding fuel is projected to moderate. Adjusted capital expenditures are forecast at approximately $7.5 billion for 2026. United Airlines' fleet plan calls for 1,166 mainline aircraft and 441 regional aircraft by year-end. The airline has installed Starlink on more than 640 aircraft and expects fleet-wide availability by the end of 2027. Currently, UAL has a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Delta Air Lines DAL reported third-quarter 2026 earnings (excluding 57 cents from non-recurring items) of $1.72 per share, missing the Zacks Consensus Estimate of $1.80 by 4.44%. Earnings increased year over year despite sharply higher fuel costs and rising non-fuel expenses. Adjusted revenues climbed 16% year over year to $17.59 billion but missed the consensus estimate of $17.74 billion by 0.9%. Broad demand strength and healthy yields lifted adjusted total revenue per available seat mile, or TRASM, 15%, while premium and diversified revenue streams continued to expand. J.B. Hunt Transport Services, Inc. JBHT reported third-quarter 2026 earnings of $1.82 per share, up 3.4% from $1.76 a year ago. The figure beat the Zacks Consensus Estimate of $1.81 by 0.6%. Operating revenues climbed 20.4% year over year to $3.68 billion and surpassed the consensus mark of $3.56 billion by 3.2%. Stronger pricing, an 8% increase in Intermodal loads and higher brokerage volumes supported growth. However, elevated driver-related expenses, fuel costs and insurance claims pressured profitability. Alaska Air Group, Inc. ALK reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum. Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion by 0.1%. Revenue per available seat mile, or RASM, rose 11.7%, supported by strong yields, premium demand and loyalty revenues. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management is prioritizing margin repair to create long-term shareholder returns, supported by their continued focus on operational excellence and disciplined growth., asserting that current pricing does not yet reflect the value of their reliable capacity. - Performance was impacted by over $50 million in sequential cost headwinds, primarily driven by driver-related investments, volatile fuel prices, and elevated medical and cargo claims. - The company is intentionally taking 'appropriate risk' in pricing discussions, accepting some volume churn in segments like JBT to ensure rates align with current market conditions and return thresholds. - Intermodal volume growth of 8% was driven by significant road-to-rail conversion in the East, though management noted that their own drayage capacity became a temporary bottleneck during the quarter. - Dedicated Contract Services (DCS) faced near-term margin pressure from elevated startup costs for new accounts, which typically take six months to reach targeted profitability. - The organization is leveraging technology to improve productivity, evidenced by a 4.5% year-over-year reduction in salaried office headcount despite a 3.5% increase in the driver workforce. - The 2027 bid season is viewed as a critical window for margin recovery, with management expecting to secure rate increases that outpace inflationary headwinds. - Guidance for Q4 CapEx is expected to trend higher to support a robust pipeline of Dedicated opportunities, while maintaining a full-year target of approximately $700 million. - Pricing implementation follows a structured timeline: approximately 10% of volume reprices in Q4, with the remaining 90% spread evenly across the first three quarters of the following year. - Management anticipates a 'modest' peak season for Final Mile but remains confident in long-term secular growth for Intermodal as shippers seek resilient supply chain designs. - Future profitability in Dedicated is contingent on the maturation of the current 'wave' of new truck growth, which requires several months of operation to offset initial onboarding expenses. - Group medical costs alone accounted for a $16 million increase in expenses, reflecting an industry-wide challenge in predicting the frequency and severity of claims. - An elevated number of train derailments contributed to higher cargo claims expense, impacting the Intermodal segment's bottom line. - Rapid fuel price movements created a timing mismatch in surcharge recovery, leading to temporary margin dilution despite the long-term recovery nature of these programs. - The 'driver-related' cost bucket includes significant investments in recruiting and sign-on bonuses necessary to support visible demand in a constrained labor market. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that slightly more than half of the $50 million headwind relates to variable driver onboarding costs that must be recouped through pricing. - While some costs will persist into Q4, the relationship between price and cost is expected to improve as new contractual rates take effect. - The current spread between Highway and Intermodal rates is more than double the historical norm of 15%, providing significant 'bandwidth' to raise Intermodal prices without stopping road-to-rail conversion. - Management is prioritizing 'sustainable' intermodal freight over transactional volume that might return to the highway if the price gap narrows too quickly. - Management confirmed they are actively reopening Dedicated contracts, even those signed recently, if initial driver wage assumptions prove inadequate for specific geographies. - These discussions are focused on ensuring reliable capacity, often resulting in customers funding sign-on bonuses or W-2 adjustments to secure drivers. - The 8% volume growth was constrained by internal drayage capacity rather than a lack of market demand; management had to 'slow down load bookings' at times to honor service commitments. - Investments in driver recruiting are beginning to alleviate these bottlenecks, with the recruiting team now more productive than during the COVID-19 peak.

Image source: The Motley Fool. Thursday, Oct. 15, 2026 - Senior Director of Finance - Andrew Hall - President and CEO - Shelley Simpson - CFO - Brad Delco - EVP of Sales and Marketing - Spencer Frazier - COO and President of Highway Services and Final Mile - Nick Hobbs - President of Dedicated Contract Services - Brad Hicks - President of Intermodal - Darren Field Operator: Good afternoon, and welcome to the J.B. Hunt Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Andrew Hall, Senior Director of Finance. Please go ahead. Andrew Hall: Good afternoon. Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now I would like to introduce the speakers on today's call. This afternoon, I'm joined by our President and CEO, Shelley Simpson; our CFO, Brad Delco; Spencer Frazier, EVP of Sales and Marketing; our COO and President of Highway Services and Final Mile, Nick Hobbs; Brad Hicks, President of Dedicated Contract Services; and Darren Field, President of Intermodal. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley? Shelley Simpson: Thank you, Andrew, and good afternoon, everyone. I want to start by thanking our employees for their continued focus on serving customers safely and consistently. Their efforts are the foundation of the progress we're making across the business every day. As I think about where we are today, it's important to remember that our industry operates in cycles. With a long tenure of our management team, we have been through numerous cycles. And what we've learned over time is that success comes from staying disciplined throughout every phase and strategically positioning ourselves for the opportunities that follow. A few years ago, our team focused on the organization and operational excellence. We spent significant time improving execution, strengthening service, driving productivity and creating a more efficient operation. Those efforts were not always easy, but they were necessary. As growth opportunities returned, we were positioned to capitalize on that demand and take market share because the foundation had already been built. We offer customers unique value across our scroll of services and remain committed to disciplined growth that will align with the returns we expect to generate. But growth alone is not the objective. Sustainable growth that creates long-term value for our customers, our people and our shareholders is the objective. As I look across the organization, we are seeing evidence that our strategy is working. We are making early progress on driver hiring, which gives us confidence in our ability to support current and future growth. Our year-to-date safety performance continues to improve on last year's record, reflecting the discipline and culture we've built over many years. We are seeing the record pipeline in Dedicated begin to translate into new truck growth and are continuing to take market share in our more transactional businesses. Customers continue to lean into J.B. Hunt. Across our organization, we're seeing evidence that customers want deeper relationships and broader engagement within our services. Importantly, we're approaching these opportunities with rigor and discipline. Every growth opportunity is measured against the return profile we expect to create. We are working daily to ensure we maintain the right balance between growth, customer service, operational excellence, and financial discipline. Looking forward, we will continue to improve productivity and lower structural costs where opportunities exist, but the largest opportunity ahead of us is ensuring our pricing reflects the value we create. We are making decisions today that we believe will strengthen margins and returns over the long term, enabling us to create even greater value for customers that will ultimately need to be covered through higher rates. The foundation is strong. The opportunities ahead are meaningful, and we remain focused on converting both into improved margins, stronger returns and long-term shareholder value. With that, I'll turn the call over to Brad. Brad Delco: Thanks, Shelley, and good afternoon. Let me start with the quarter. On a GAAP basis, total revenue increased 20%, operating income increased 2% and diluted earnings per share increased 3% versus the prior year period. Sequentially, operating income fell 5% from the second quarter at the better end of the guidance we provided in the quarter. These results reflect strong demand for our services and disciplined execution. We absorbed near-term cost pressure while investing behind growth. We are protecting our networks, growing with purpose and positioning the company to generate stronger returns as our pricing catches up with our strong value proposition. At an investor conference in September, we identified 3 primary cost headwinds this quarter: driver-related investments, volatile fuel prices, and higher claims and medical costs. Driver-related costs include recruiting, onboarding, training, sign-on bonuses and targeted wage actions. In total, these cost buckets, driver-related, claims, and fuel, impacted operating income by over $50 million versus the second quarter of this year, and group medical costs alone accounted for more than $16 million of that increase. These costs are real but the context matters. Driver investments support visible demand and prepare our networks for growth. Fuel surcharge programs recover costs over time, although rapid movements create a timing mismatch and dilute margins. Risk and medical costs remain an industry-wide challenge, and an elevated number of train derailments drive up cargo claims expense. We will control what we can through safety, productivity, asset utilization and disciplined execution. Importantly, we have not given back the structural cost improvements from our lowering our cost-to-serve initiative. These pressures are either more cyclical or unpredictable than structural and reinforce the need to price our services for the value, capacity and reliability we deliver. Turning to capital allocation. Our priorities remain consistent and return focused. Net CapEx was $146 million in the quarter, primarily supporting replacement needs. Based on a robust pipeline of Dedicated opportunities, we expect CapEx to trend higher in Q4, but still targeting approximately $700 million for the year. We repurchased approximately $174 million in stock or over 700,000 shares in the quarter, the majority of which were purchased towards the end of the period. We will invest where returns are compelling, preserve our investment-grade balance sheet, support a growing dividend and remain opportunistic with repurchases. We will not deploy capital simply to grow. Every dollar must strengthen the business and create long-term shareholder value. Let me close with 3 points. First, disciplined growth is working. Our service, scale and execution are earning customer trust and creating share gain opportunities. Second, margin repair remains a top priority. We have done the hard work on structural costs, and we'll be equally disciplined in securing price that reflects the value we create. Third, we are supporting long-term growth from a position of strength with experienced people, proven technology and available prefunded capacity. We have confidence and focus on converting execution into durable earnings growth and stronger shareholder returns. That concludes my comments. I'll now turn it over to Spencer. Spencer Frazier: Thank you, Brad, and thanks to everyone for joining the call. In a dynamic, rapidly changing market, our people remain focused on what we can control: serving customers, improving execution and helping shippers create reliability across their supply chains. Our teams have earned customer trust by doing what we say we will do and that trust is reflected in the depth of our relationships and growth of our business. Over the last several quarters, we've spent a significant amount of time discussing the structural changes taking place across the transportation industry. The pace of this change created tender acceptance, cost and driver availability challenges for our customers. Capacity remains constrained, operating costs continue to move higher and supply chains are seeking out providers that can deliver reliable capacity at scale. Most importantly, customers have gained a much clearer understanding of these realities. The conversations we are having today are materially different than those we were having a year ago, 6 months ago or even last quarter. During the quarter, demand across our scroll of services continues to outpace the broader market. Our customer retention remained strong, and we saw continued growth in our commercial pipelines. Customers are proactively engaging with our commercial teams across all business units as they evaluate efficient network designs, transportation procurement strategies and long-term capacity planning. As part of those discussions, we are seeing customers become increasingly focused on provider quality, resiliency and operational execution rather than viewing transportation strictly through the lens of procurement. While working with customers to create differentiated value, we also believe the industry is entering a new phase of the cycle, one that has moved from repricing transactional capacity to repricing contractual capacity. You can see from our results, our work started with ICS and repricing our transactional brokerage business in Q2. Then JBT quickly repriced our portfolio in Q3. And now we are actively repricing our JBI and DCS business. Customers understand it is getting more expensive to support the capacity, the service and the professional driving jobs that power America's supply chains. They understand that reliability creates value beyond the rate per mile. That's the foundation for our pricing conversations. Simply put, we remain focused on delivering operational excellence and being compensated for the value we create for customers. We are confident in our ability to help customers achieve better outcomes and confident that those outcomes will continue to be reflected in the returns generated across our business. With that, I'll turn the call over to Nick. Nicholas Hobbs: Thanks, Spencer, and good afternoon. I'll provide some updates on our Final Mile and Highway businesses, but I'll start with an operations update. A key piece of our work to be operationally excellent involves our commitment to safety. Building on the past 3 record years, I'm proud that our safety performance year-to-date is measured by DOT-preventable accidents per million miles continues to best last year. Our team has done a great job of onboarding a significant number of new drivers in the past several months while investing in training to ensure future success at J.B. Hunt, which has safety at the core. On the driver front, our driver need to support current and future growth of our business remains elevated. We have opened the same proven playbook we have used in past cycles and implemented various strategies to attract and retain drivers. We are seeing good results from these actions as our driver hiring success improved throughout the quarter. We continue to believe the industry will need to further invest in professional drivers who operate safely and comply with industry regulations. Shifting to the business. In Final Mile, our demand in our fulfillment business remains strong, and we are expanding with customers in this vertical. In our core end markets of furniture, exercise equipment and appliances, demand remains stable. Our sales pipeline across Final Mile remains encouraging, and we continue to have conversations with both new and existing customers around new opportunities as we work to offset as much of our previously disclosed $90 million revenue headwind. Going forward, we're expecting a modest peak season in Final Mile and our focus remains on repairing our margins through disciplined growth so that the returns match the value we create for our customers. In JBT, we have spent the past couple of years focused on operational excellence, really earning the trust of our customers through our service. This trust has afforded us the opportunity to have discussions with customers to address rates that we're no longer able to source capacity in the market. We took an appropriate amount of risk in these discussions. And while we did see some volume churn from customers, we remain disciplined on rate and quickly addressed our profitability woes in the second quarter. These new rates were implemented throughout the third quarter, and we have actually seen some of the volume that churned come back to us in the form of mini bids. Going forward, we remain focused on providing high levels of service while maintaining our open dialogue with customers to ensure our rates remain aligned with the current market conditions and the value we create for our customers. I'll close with ICS. The positive momentum we have in this business continues to build. We have been successful in adjusting our prices to the value we create and to reflect the current market conditions while remaining disciplined. In the quarter, gross margin expanded almost 200 basis points sequentially, supported by our focus on returning the business to our margin targets. The Truckload market remains dynamic but we are confident in our strategy, our team and our ability to quickly adapt to changes in the market. We continue to see opportunities to further grow market share, driven by the strength of our service, our platform, and our customer relationships. Going forward, our focus has not changed. We expect to leverage our cost through the use of technology and to continue to scale volume through the platform to drive disciplined profitable growth in this segment. With that, I'd now like to turn the call over to Brad. Bradley Hicks: Thanks, Nick, and good afternoon, everybody. I'll provide an update on our Dedicated business. Starting with the quarter. At a high level, our third quarter results were below our expectations as overall solid demand was more than offset by growth-related expenses and additional inflationary cost pressures. While the results this quarter do not reflect the underlying strength of the business, my confidence in the long-term opportunity and our margin expectations for our Dedicated business have not changed. More on this in a minute. During the quarter, we sold approximately 425 trucks of new deals, bringing our year-to-date new sales number to 970 trucks compared to our full year target for gross sales of 1,000 to 1,200 new trucks. Even with this strong sales performance, our pipeline remains at record levels as customers continue to engage with us about an outsourced fleet solution amid current market dynamics. In September, our pricing activity was up almost 50% compared to last year, and the amount of business going through an engineered design request is near record levels. This activity continues to be supported by our disciplined pricing approach to targeted returns on our invested capital. In the quarter, we also saw customers look to grow existing fleets with us. Historically, these decisions have been largely demand-driven at the customer level. Today, however, much of that growth is being driven by a desire for additional Dedicated capacity as third-party capacity has proven less reliable. We have a proven track record of creating value for customers, and we believe our operational excellence, combined with our disciplined approach, allows us to offer solutions that are differentiated in the market. During the quarter, we faced inflationary cost pressures from the areas that Brad outlined earlier as well as absorbing start-up costs associated with onboarding new business. As we bring new accounts online, the cost of getting these accounts up and running is elevated in the current environment, particularly due to the expense of recruiting and attracting drivers. Historically, I have talked about taking roughly 6 months for a new account to get to targeted profitability. While this dynamic creates near-term pressure on results, it also positions us for future earnings growth as these accounts mature. For existing fleets, we continue to assess driver needs and driver pay on an account-by-account basis and are working with customers on the economics associated with these costs. We are making good progress in those discussions and this will remain an ongoing effort in light of the limited supply of qualified drivers in the market. Throughout the year, I have discussed my expectation that we would return to fleet growth in the second half and this quarter provides evidence that we are starting to see the wave of new truck growth materialize. As a reminder, we need to see this wave build for a few months before it translates into improved profitability. Going forward, with multiple quarters of strong truck sales and a pipeline that remains at record levels, I expect the fleet growth to continue. At the same time, we will likely see some modest margin pressure associated with starting up these accounts. Importantly, this is a healthy challenge to have as it's driven by growth. More importantly, it is disciplined growth, supported by long-term contracts that meet appropriate return thresholds. My confidence in our Dedicated business remains very strong. We have a proven track record of consistent financial and operational discipline, a large addressable market and a differentiated value proposition for customers, all of which position us to deliver compounding growth over many years. With that, I'd like to turn it over to Darren. Darren Field: Thank you, Brad, and thank you, everyone, for joining us this afternoon. I said last quarter that the value proposition for Intermodal is the strongest it has been in more than a decade, and I feel even more confident in that statement today. Our strategy and service levels are driving market share gains and customers continue to want more of our Intermodal capacity. During the third quarter, demand for our Intermodal Service was strong, and we continue to set quarter volume records. For the quarter, volumes were up 8% year-over-year. And on a monthly basis, volumes were up 9% in July, up 8% in August and up 9% in September. With Truckload capacity tight, elevated and volatile fuel prices, and solid intermodal service, shippers are converting freight to intermodal at a strong pace and customer demand is outpacing our available capacity. During the quarter, transcon volume increased 1%, while our eastern volume increased 18%. We continue to see significant road-to-rail conversion opportunities in the east and are being disciplined in our volume growth, prioritizing lanes and freight that we believe will be sustainable intermodal freight over the long term. The rail network continues to experience elevated volume growth, and we remain in active dialogue with all our rail providers on resource planning needs for both current demand and future volume growth. Overall, rail service remains solid but has taken a small step back in part to the strong domestic intermodal volume growth as well as increased international intermodal volume. Historically, international intermodal containers have created operational challenges for railroads and have been one of the least efficient portions of their network. That said, we remain confident and encouraged by our rail partners' commitment to reliable service and our collective ability to support future volume growth. As we enter into October, we are also kicking off the beginning of our 2027 intermodal bid season. Before I provide some thoughts there, I want to provide some color on how our '26 bid season ended up. The '26 bid season was a tale of 2 halves, and we built momentum on pricing as we moved through, especially in the last few months. For the overall network, we realized low single-digit increases in pricing during the last bid season and are seeing positive contribution from these pricing actions in our results. That said, the operating environment to date is vastly different than that of just 12 months ago, and the value proposition for our Intermodal Services is significantly higher. Since our last earnings call 3 months ago, we have seen increased inflationary cost pressures in our business, primarily related to driver availability, which has only amplified the magnitude of the price increases needed during this bid season. While the volume of activity remains relatively small this early in the bid season, I am encouraged by the early results we are seeing on what are some of the oldest rates in the system. After 4 challenging years during the freight recession and continued inflationary cost pressures across the business, our focus during the 2027 bid season is on repairing our margins to earn an appropriate return on our investments to support our future growth. Today, I'm even more confident in our ability to price our services to the value we are creating for our customers than I was a couple of months ago. Our service and capacity are unmatched and are built on the foundation of operational excellence. With that, I'd like to turn it back over to the operator to open the call for questions. Operator: [Operator Instructions] Our first question today is from David Vernon with Bernstein. David Vernon: So Darren, I think you left the nice little transition there in terms of you're optimistic about what you're really seeing on bid season. Any way to quantify kind of maybe what you're seeing right now? And then I think in a former call, you guys had talked about maybe repricing 10% of the business during this quarter and then it kind of phases in over the next year. Any help you can give us in terms of shaping that path and when renewals would go into effect with the new pricing that you're seeing now, that would be helpful. Darren Field: Sure. Thanks for the question, David. We've highlighted for several quarters now, we reprice or implement about 10% of the volume in the fourth quarter. And then 30% of the volume receives new pricing each of the first 3 quarters of the year. In terms of providing feedback on pricing we're not going to guide for that. Hey, costs are a challenge for our industry. Bringing on drivers, driver pay, all things insurance-related, just we're faced with a number of cost challenges and we're asking for larger rate increases certainly than what we've shown so far. And so I'm not going to highlight a forecast or anything. What I'll tell you is it's more than what it has been. So I'll just answer it that way. Operator: The next question is from Jonathan Chappell with Evercore ISI. Jonathan Chappell: Brad Delco, question for you. So this over $50 million of expense headwind, I think maybe it would help if we can understand how much of that was really onetime in nature and therefore, becomes a tailwind from 3Q to 4Q? And then for the rest of it, how do we think about the timing of kind of pricing recouping that, whether that's in Intermodal or Dedicated? So just kind of parsing out over the next couple of quarters, how that $50 million chips away back to breakeven or even a tailwind at some point. Brad Delco: Yes, great. Jon, I'll answer what I can on that and try to avoid giving too much forward-looking guidance. I think we did a pretty good job of breaking it out at the conference in terms of where we expected these costs to land for us for the full quarter. And I think that for the most part, those costs landed pretty close to where we expected, which would be indicative of us obviously coming in at sort of the better end of the guidance range that we provided to you guys. But of the $50 million, let's call it, slightly more than half of that, we think, are the cost of us onboarding, training and putting through some of the sign-on bonuses and driver wages that are required. Think of these more as kind of the variable cost, but the costs that will, without a doubt, need to go get recouped with pricing. Fuel to me is one of those, man, it was just really showing some odd volatility throughout the quarter. And I think right about the time or the week after we made some of our comments, thankfully, fuel sort of tailed off a little bit towards the end of the quarter. So maybe slightly better than what we thought it was going to be. That to me, again, I would assume we'll catch up and recoup some of that fuel headwind. The medical claims or the medical costs that including -- let me just say claims in general, cargo casualty and medical. I think that ended a little bit worse than what we thought, but mostly on the medical side, particularly in September. And listen, frequency and severity of things, whether it's casualty claims or medical claims, it's really hard to predict. Man, I knock on wood, and I'd like to say some of those shouldn't repeat, but we never know. And so my hope is that, that does get a little bit better for us going forward. But I think what I want to land on is, hey, some of these costs will be with us in Q4 as well as into next year. But I think more importantly, every day that goes by, I think we make a little bit more progress on the pricing side. And so I think the relationship between price and costs moving forward should get better from what we saw in August and September. Hope that addresses as much as I can. Maybe to touch on, Brad, I mean, I don't want to give quarters or months in terms of how long we think it takes you to go out and get some recoupment of these costs or Darren, but anything you want to add there? Bradley Hicks: What I would say, Brad, is that we are really active and very granular down to the account level on what we think our needs are, and we're actively talking with our customers. There's nothing in our agreements today that prevents us from having and reviewing the economics of each unique deal to ensure that we can have the reliable capacity to meet their needs. And so those conversations are extremely active. We're having success. But yes, it's going to take some time. There are situations where we have anniversaries right around the corner. And depending on the severity of need at each location, we may elect to wait until those proper anniversary dates. So it's going to take a little bit of time. We've talked all year about how the pricing would lag, both in Intermodal and Dedicated to what we've seen in the one-way Truckload space, but we're in that moment in time right now. I hope that helps, Jon. Shelley Simpson: Jonathan, I'm sorry, I want to make a point also. Just any time that we see this pressure happening from a driver environment, typically yields a much better pricing environment for the next bid season. And so if you just think about the tightening that occurred even here in the third quarter more than the second quarter, and we're starting our bid season as we speak, our customers understand the value that we create to bring more drivers to them. When we're feeling that driver pressure, they're feeling that pressure as well. It's why you've heard several comments earlier around our confidence and our ability to earn an appropriate return for the value that we create, and that's what we're really focused on. Operator: The next question is from Brian Ossenbeck with JPMorgan. Brian Ossenbeck: Just real quick to define the start-up cost that Brad Hicks was talking about, those are assumed separate than the other $50 million. So those are just kind of normal growth costs if you call it. So I just want to confirm on that. And then maybe for Spencer or for Darren, we've seen spreads are pretty much as wide as we've ever seen them for versus truck. What do you consider sort of normal in, I guess, the east and the west for transcon? How much can you lean into that without kind of maybe hurting some of the Truckload conversion, which is also the first time we've really seen that come to the market in this sort of fashion. So clearly, there's an emphasis on price. But I also want to hear a little bit more about how you balance that out both from a resource perspective and a volume perspective as well. Brad Delco: Yes, I'll let Brad Hicks comment on the start-up costs and then pass it over to Darren and Spencer. Bradley Hicks: Thanks, Brian. Yes, I think 2 things. One is they are separate from the quarterly cost that Brad made reference to, and we typically always have some degree of implementation expense in any quarter. We have ramped that up as the year progressed. So we had more onboarding occur in Q3 of this year. And I think the other thing that I highlighted in my prepared remarks that I want to maybe accentuate that is costing us more in today's environment than we had historically seen. And because of some of the same effects that Brad referenced, the sign-on bonuses, the costs associated with our recruiting efforts for those driving resources. Those are somewhat elevated because of the environment. So to answer your question, there's a little bit of normalcy in our start-up, but a little bit of abnormalcy as well. Spencer Frazier: Yes. And then, Brian, you mentioned it really that spread between Highway and Intermodal is significant. I'd say it's more than double what the historical norm is, of say, around 15% and that creates an opportunity as long as we have reliable, consistent service and capacity, which we do. And so we started to see some of that price change in the quarter. We're actively having conversations to close that gap, but it's based on the value that we create. We do know that reliability today is winning over the lowest rate. And we believe that the opportunity for continued conversion on the highway will happen because the cost of providing highway transportation capacity is high and continuing to go higher. So our opportunity today is really to catch up and then ultimately outrun that cost change. And we've proven we've been able to do that with our commercial teams with our ICS results in Q2 and our JBT results in Q3. So anyway, actively trying to close the gap, and we view it as a significant opportunity to get back to our return profile. Operator: The next question is from Chris Wetherbee with Wells Fargo. Christian Wetherbee: I guess I want to maybe pick up on that answer, Spencer, and think about sort of the speed at which you can kind of go through this. I think there have been a couple of comments on the call about this being the opportunity to kind of get the pricing during bid season and have margin repair via that pricing. So is closing that gap the kind of thing that takes sort of one bid season? Do you think that the gap has gotten so wide that maybe it takes more than that? I just want to get a sense of like what you think the opportunity is in terms of timing for closing that gap. Darren Field: Well, let me -- Chris, let me jump in there. This is Darren. I just -- in terms of closing the gap against truck, look, we're faced with a pricing cycle and a capacity crunch, if you will, as we go into the next pricing cycle. I don't think anybody at J.B. Hunt believes the Truckload rates are not also going to continue to climb. So while there has grown -- the gap has widened for now, as we go into this next cycle, I believe and feel very confident that we will be able to achieve rate increases that cover our inflationary expense while also expanding beyond that to help us improve our margins. Now does that answer with an expanded margin fully closed the gap as far as it can? I guess I don't really know and nobody will know until we go through this year. But as we go through this pricing cycle, we're very confident that we can achieve price increases that will repair our margins. That is a top priority for us as we go into this cycle and something that kind of Shelley highlighted, I mean, having visibility to these costs that really kind of punched us in the nose in the third quarter, I'm really grateful in a way that we get to see those at this point in the cycle so that we're fully prepared for that as we move into the 2027 bid season. Shelley Simpson: Chris, it's Shelley. I want to just make sure I'm clear about our direction moving forward. If you think about what's happened over the last 4 years and the gap between what our costs were and what pricing really could deliver. The gap was significant. And we've been talking to our customers. But the first part of our strategy was really making sure we were operationally excellent, making sure we were at the front of our customer scorecard, we were leaning in and creating more value. And we have done that, and that has become cultural across all 5 of our business units. You sense a level of confidence from this management team because we know that our cost base is going up. It has gone up, and we believe that it will continue to go up. To what degree? We don't know. But what we do know is the level of value that we've created for customers. And so we've been in those conversations. You heard Spencer reiterate that we've already done that with both JBT and ICS and still more to go, but we are approaching that across all 5 of our business units. So our objective, whether we can close the gap or not will remain to be seen, but we have an objective to get ourselves inside our margin targets and that is what this team is focused on, and we believe that we can grow and we can get inside our margin targets, and we are moving ourselves towards that and even more increasingly convinced of that today. Operator: The next question is from Scott Group with Wolfe Research. Scott Group: So I think what I've heard is Q3 was the worst of like the cost price mismatch. Did I hear that right Darren -- Brad, sorry, Brad? And then, like, is there any way to think about, like, when does that turn positive? And then I just want to -- like the last question, I'm just a little confused about sort of the message. I think what you're saying is you don't know if you fully close the price gap versus truck in a year. But I guess, what I'm trying to understand is do you think we get just 1 year price enough to get us into -- back into the margin range that you've laid out for us? Darren Field: Well, I'll jump in there, Scott. This is Darren. Certainly, do I believe we can achieve our margin target coming out of next year? Certainly, I believe that. There's no reason that this environment would not present us that opportunity to do that. And I believe that as we look back at Q3, man, we had a ton of cost just to build up our driver hiring team to really ramp up some personnel expense related to how we hire and attract and retain drivers. And those people as they came on board, were not fully productive yet. Well, as we sit here today, those employees are more productive now than they were in the third quarter. So we're getting some benefits against that investment from the third quarter right now. So there are elements of that expense that I do think certainly would be the most severe mismatch against where prices were. And we're entering a cycle where we get to talk to more customers in the normal course of their bid season. And so it just -- it functions better. Now, all that being said, we're only going to reprice or implement prices on roughly 10% of the Intermodal book of business plus any growth that we have in the fourth quarter, then you get to 30 more -- 30% more in the first quarter. So it does take some time into next year before the prices really begin to show up inside the results. Brad Delco: Scott, this is Brad. I want to kind of piggyback off of what Darren said because I think it's a good point. The price/cost relationship, if we think that the pricing outlook improves from here, then I think that the statement is true, but there's a couple of buts. But the one other thing that Darren said that I think is important is as we were sort of growing the driver recruiting team, it took time before that investment started resulting in more drivers to support our growth. And so for that investment, I would say we are seeing really strong pipeline of drivers coming out of that team, and we actually are seeing close to records but with a team that's 30% below the peak of that same group during COVID and some of the technology investments we've made there has made that group more productive. So I think we're getting a return on that investment, particularly on recruiting drivers. It's helping support the needs that both Brad and Darren have. And so I think that relationship improves on top of the price/cost mix. My only caveat to that, I mean, obviously, first quarter is always the who-knows-what with weather, volumes typically are softer in Q1. So there may be deleveraging across the system and network on overhead costs. But one other thing I wanted to share that it was a good stat as we reviewed the quarter. As we look at our salaried office personnel, our head count was down about 4.5% year-over-year in the fourth quarter -- sorry, in the third quarter, but our driver count is up 3.5%. And so I think that sort of shows you the investments we're making are really where demand is requiring us to make these investments. And I think we get, obviously, more volume and more return out of some of these investments. So I feel good. I don't want to give guidance to that, but I just -- I feel good about where we are today and the trajectory of where the business is heading. Operator: The next question is from Bascome Majors with Stephens. Bascome Majors: Darren and Shelley, I wanted to follow up kind of the comments that you both made here. I mean you've talked about the 30% change price gap to contractual Truckload and Intermodal, and obviously prioritizing getting the price that you've earned to restore margin. But Shelley, you also made some comments about we also plan to continue to grow in our business, and I think that included intermodal. And I think it would be helpful, Darren or Shelley, whoever wants to, could you guys frame where you feel your customers are on what they've converted and what they have left to potentially convert? And within the context of the kind of volume that you think can stick and really drive that durable profitable growth you're seeking to achieve here. Shelley Simpson: Thanks, Bascome. So let me just start with the high level with the company, and then I'll let Darren kind of lean in from there. So when I say we're going to grow, we are a disciplined growth company. Each one of our 5 business units has significant growth ahead of them because of the addressable market, the operational excellence we're doing for our customers, and our customers are leaning more into us across all of our services. And so I have confidence that we're going to grow through this next bid season, part of that confidence comes from the really tough conversations that we've had with our customers in both JBT and in ICS. Also Brad Hicks is having that as we speak inside Dedicated and some of the early conversations we're having inside Intermodal. And so when I think about that across the board, although we're a, call it, $13 billion, $14 billion organization in revenue, the addressable market is $600 billion. And so we've set ourselves up strategically to align directly with our customers at the time that they need us the most. So we're the best service provider when growth will be critical and important to them. And if you think about that from an Intermodal perspective, I think that only yields to us doing even more business, especially with the current setup. And maybe I'll turn it to you, Darren, to give more color. Darren Field: Sure. Look, I think when we hear gaps of 30% to the over-the-road pricing, fuel inclusive, I mean, there's a lot in that. 18% growth in our eastern network is a key stat as well out of the quarter. Look, I don't want anybody to think that all 18% of that growth came in at a 30% discount to the Highway rates. That's new business is coming on and continues to convert off the highway at smaller discounts to that. Now if we start asking for prices that are -- create less than a 15% discount, you're going to slow conversion down. I do -- I want to acknowledge that there is a point at which you won't convert Highway business. But the amount of room we have inside that pricing gap gives us pretty good bandwidth. And every single customer -- I'm going to have Spencer comment, too, from a sales perspective, but all of our customers continue to tell us their top priority is to find a road-to-rail conversion for intermodal deep into next year. I think it's also important to say there's a lot of volume available to us that we can recognize as soon as the gap from Intermodal to Highway closes may go back to Highway. And part of our disciplined approach is we're not chasing that. We're not chasing the business that can be -- it's going to leave Intermodal. We're very focused on making sure that this growth sticks with us. And as we're providing value to our customers, we'll get to -- and that consistency in the service we've been providing, I mean, this is 4 years of investment in operational excellence, and I really do believe it's paying off today and it's going to continue to pay off as we go into the next round. Spencer, you may have something... Spencer Frazier: Just a couple of quick comments. I might just follow up on where you just left off. If you don't know that we're ranked or rated America's #1 intermodal provider for the seventh consecutive, seventh consecutive JOC survey that started in 2023. That goes back, Darren, to your operational excellence commitment. And we know that, that creates value. It gives us opportunity to improve and increase our current share of Intermodal business and pick up where other carriers are failing. Our mini bid activity in the quarter was significant. And that really wasn't significant due to network changes that customers have or increased business or things like that. It was where they needed reliable capacity and our mini bids create opportunities for us to move faster and improve our position, not just in share, but also in price quicker. So operational excellence matters. Darren, you mentioned in your comments that our customer demand is outpacing our available supply, and that's another proof point of our opportunity to move the ball down the field quicker with Intermodal. Shelley Simpson: Bascome, I want to add one more thing you asked specifically about, is the growth available for Intermodal? For more than a decade, we've seen in our bid and data warehouse that there's 7 million to 11 million shipments available to convert off the Highway into Intermodal. Only through the last 3 to 4 years, has there been a level of consistency that continued to build where that can be a reliable part of our customer supply chain. And so now there's active conversations that we're having with customers is about converting to Intermodal for the long term. And that's why we believe there will be secular growth that continues to occur, along with us having the ability to recoup our cost and the pricing that we give to our customers based on the value that we're creating. Operator: The next question is from Richa Harnain with Deutsche Bank. Richa Talwar: So Darren, this is a nice segue. I think you repeated a quote, but you said that customer demand is outpacing capacity. I'm just trying to reconcile that with the fact that Intermodal volume growth this low despite an easier comp. I would guess that was more about capacity and driving that slowdown relative -- versus anything else. If that's the case, I just wanted to understand, are your recruiting and capacity investments beginning to alleviate those bottlenecks? In the previous answer, you said there were -- that your recruitment efforts really ramped up in 3Q and those new employees weren't the most productive. I just want to, again, better understand if we're through the most intensive phase of those investments or do costs still have room to move higher, but you just feel better about your ability to recover them through pricing? Darren Field: Well, I appreciate the question, Richa. Certainly, in the third quarter, our volumes, there was more available to us than what we were able to execute. And you heard us highlight challenges on the driver market. And I don't remember a time when our own drayage capacity became a little bit of a bottleneck for us. And we probably face some of that as the third quarter moved on. And that's -- that was a little bit of a surprising position to be in. That's not something we're used to and thus we highlighted cost challenges as a result of that. So I don't want the 8% volume growth in the third quarter to represent that's all we can do. Certainly, as the quarter went on, we had a lot of success in hiring drivers, but we had some moments during the quarter where we had to slow down load bookings and we had to make sure we were able to honor our commitments. It's a very important part of our operational excellence process with our customers. They believe in it. It gives us long-term growth strategy. So as we move forward, I think that the ability for pricing to cover those costs is certainly very important. But I have no lack of confidence that our customers, they're not surprised by our discussions around our costs. Like this -- I think as this year went on -- early on in the year, there was some concern and a lot of pushback from customers on price increases, but as the year has gone on, those conversations have become more realistic. I don't -- it's not easy. No customer is handing us money. I don't want anybody to -- we have to go in and work with them and be clear as to these costs that we're facing. And I think that the realities of the market are helping our customers acknowledge that's where we're at. And as we move forward, I have no doubt that we can get prices that return us to the margin profile that we all expect to be at. Operator: The next question is from Jordan Alliger with Goldman Sachs. Jordan Alliger: I just wanted to come back to Dedicated, and you might have touched on some of this, but I'm just curious, are you actively reopening contracts in Dedicated that perhaps you signed 6 months ago? And as you've started to start them up, realized costs might be accelerated faster. Have you been able to go into even some of those more recent contracts to rejigger them before they actually get going further? And then can you maybe talk to, of the $50 million or so of cost headwind, what proportion would you say was tied into Dedicated? Just trying to get a sense for the timing of margin repair in Dedicated as we move ahead. Bradley Hicks: I'll start, Jordan. It's Brad Hicks and maybe let Brad Delco respond to the second part of your question. Yes, the answer is yes. And what I said earlier is there's nothing in any of our agreements that prevents or precludes us from reviewing and having conversation with our customer to ensure that we have the right economics in place to meet and exceed their expectations from a reliable capacity and value creation. And so we do have examples. We have examples of business that we implemented in early August that we've already readdressed because our starting driver targeted wage was inadequate in certain geographies. And so when we have open trucks, and we're slow to hire at the onboarding and the start up of that business, it makes it really easy for us to at least work close with our customer with proper alignment on the strategy that we're going to deploy. In some instances, that's funding and supporting the funding of sign-on bonuses. In some instances, it's a dramatic W-2 adjustment. And so we're evaluating the entire book of business. We are choosing our spots relative to which customers we're going to now with the greatest needs versus those that maybe are smaller in terms of what the gap is, but we will look to address all of our needs throughout the next few quarters. Brad Delco: Jordan, this is Brad. With regards to the second -- or the first part of your question, I would say, I mean, we have the most number of drivers in Dedicated. We have the largest number of employees in Dedicated. So when we think about really, the cost on hiring, recruiting, training drivers, you can kind of get to the conclusion that more than half of it was DCS. And then two, in terms of medical costs and how we allocate those across the business, given it's the largest segment, they also saw the largest increase or miss to budget or forecast on some of the group medical costs that we saw. But I think that's probably the extent of the detail I'm willing to provide on that. Operator: The next question is from Ken Hoexter with Bank of America. Ken Hoexter: So Brad, is there like -- I guess, a lot of discussion on pricing. Is there a level of pricing you need on the system average to -- maybe in Intermodal to get to those margin targets you've been doing what, 2% ex fuel, 11% all-in. So does ex fuel have to get to double digit in this cycle? Just trying to understand kind of the level you need. And then can you talk about capacity? I think it was mentioned before kind of the percent of boxes still in storage and maybe thoughts on CapEx to get there. And then just a clarification. Nick, you noted risk in ICS. Were you talking about carriers post-Montgomery? I just want to understand the statement of risk at ICS. Brad Delco: There were 17 questions there, so I'm trying to process, which one was first. I lost track. Darren Field: Let me go first. Well, he's asking what level of pricing is required to achieve the margin. Brad Delco: Yes. Well, to -- I mean, Darren, you answer this, the 2 call-outs, revenue per load ex fuel, up 2% with 18% eastern network growth and 1% transcon, you could view that as negative mix. And so that would suggest to you that we did get something stronger than 2% on the network, looking at it on maybe like a same-store sales basis or something. Darren, I think when we were at a conference, you said that CFO shouldn't answer questions about how much price we need. That's why you guys don't let me meet with customers, so why I don't I now pass it over to you and let you answer? Darren Field: It's very important that Brad Delco remembers, we don't have a business if we don't have customers. It's -- look, I know why you're asking the question, Ken. At the end of the day, our pricing has to outpace our inflationary cost or we have to find methods of taking cost out. I think as we went through 2025, we were very effective in our lowering our cost-to-serve initiatives, and we saw success. We've been able to sustain that. The low-hanging fruit, if you will, or maybe that's the wrong term, just big initiatives to get cost out are going to be very difficult in this environment given just inflationary headwinds. So it is more about price at this point. So I don't have an answer for you in terms of when you see a different revenue per load price change, all of a sudden, that means that we fix our margin. Just what I'm trying to represent is it's absolutely the best environment for us to go deliver improvements in our margins, given how well we've done for our customers, how well we've executed on peak season for our customers and how well our organization does in this kind of environment to join forces, get the drivers we need, build our capacity answers, and solve problems for our customers. So this is the time that we need to prove that, and we'll let our results be the proof that we know what we're doing. Nicholas Hobbs: And Ken, this is Nick. The risk, I think, that you're talking about that I said in my statement was the truck, we put business at risk. So we took some bold moves on rates, and that's both in ICS and truck. And we lost some business, but ultimately, a lot of it come back to us at the price that we needed. So it was just a risk of putting that business for price. Brad Delco: Yes. I think I want to add 2 things there, because I do remember us previewing that with our investors last quarter on this call to say, "Hey, we know we need to take some risk." We lost money in JBT last quarter, and that tech team did a tremendous job turning around the business very quickly, and it's because of operational excellence and the ability to go to customers. And so I mean, we have the playbook and we have a blueprint and we typically see rate move first in brokerage than in truck. Obviously, Intermodal closely follows with Dedicated. And so everything to me seems to be playing out just like a normal cycle and just want to reiterate that. Number two, I know margins are important, and clearly, that is a top priority for us as we go into 2027. But there was a question -- or part of your question, Ken, about containers and capacity, we have capacity to grow into and the capital we've deployed, we've talked about prefunding our growth. And so on a trailing 12-month basis, I believe our operating income is up 16% or 17%. And most of that was done without really the benefit of price but what's also important is if you look at our invested capital, at least our average invested capital balance third quarter of '26 versus '25, it's down about $400 million. So we've seen about a 200 basis point improvement in our return on invested capital, which is still our North Star. Now we will improve our returns on capital by improving margins, but we will also be disciplined on how we deploy our capital, and we've certainly been very active in returning a lot of value to our shareholders through share repurchases and dividends, and that will likely continue. So with that, I'll turn it back to -- one more question. Okay. Operator: And the next question comes from Tom Wadewitz with UBS. Thomas Wadewitz: I wanted to ask about the Intermodal dynamic in the west. You did see that kind of lower 1% growth. I think you had referred maybe earlier this year to competitive dynamic in the west that was kind of constraining things. I just wonder if that's a factor in the relatively low transcon intermodal volume growth and do you think that's going to change? Like would it be reasonable to expect an acceleration in that volume as we look forward? And then just real quick for Spencer, what do you think on peak, like your services are doing great, but any kind of broader comment on customer views on normal peak, strong peak from a broader truck perspective? Darren Field: Yes, Tom, Darren here. Just the transcon growth at 1%, I would agree, has been -- we would have maybe thought that, that would have been a little better than what it has. I think we have been very disciplined over a number of years. We don't want to grow too fast in any -- in the headhaul and just eat up the benefits of that growth with the cost of repositioning empties. And so that market has had some of its own challenges. Also the Highway capacity that has been so challenged in the east, there's an awful lot of additional customer asks for intermodal capacity in the east. And out west, I'm not sure I'd tell you that the demand for what we're doing from our customers has the same robustness, if you will. It's just not quite as strong and you're not really faced with a lot of highway conversion. That's not really what the competitive forces are in the west. It's typically more intermodal or you're competing against all-water or you're competing against intact international. So those are really the elements. I think that as we do every year, we asked for prices early in the bid season, and we lost some business out west. So that's when we referred to competitive forces surprising us. That would have been 2 or even 3 quarters ago. I don't think that in today's environment, I think everybody is faced with cost challenges, and I would fully expect prices on the western business to also improve. And certainly, as capacity tightens up, our ability to reposition empty equipment in order to create the capacity remains really strong. And so we're ready to solve for our customers out there. It just hasn't -- we haven't seen quite as many opportunities for growth there. Spencer? Spencer Frazier: Yes. Tom, I'll just wrap up by saying the demand for all of our services across the country is really strong right now. And when you think about your peak question, I would say kind of the normal shape, there is a little bit of a slower start. However, we do have peak volumes coming to us, not just off the West Coast, but also off the East Coast and significant opportunities to pick up share where maybe others don't have capacity today. And that can be West Coast, cross-border Mexico and across our eastern network. And then second, I'll just add, I want to go back to JBT. I'm extremely proud of the work that, that team did in creating value for our customers. Then Nick talked about risk, putting business at risk, but a lot of that business really boomeranged back to us. Our customers have to check the market when we do that. We understand, but it came back to us at different times which really allowed us to even say and reinforce our value proposition in that segment. And that's really what we're going to continue to do across the board in all of our businesses. We're going to make sure that we are creating the right value for our customers and making the most of opportunity that fits our networks and where we can provide great service and capacity. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Shelley Simpson for any closing remarks. Shelley Simpson: Well, thank you for joining our call. And I want to close with just repeating and reiterating our priorities outlined at the beginning of the year. But I actually want to do it in a little different order. First, our priority from now moving into next year is repairing our margins to create long-term shareholder returns. We feel confident we can do that because we have created disciplined growth through our operational excellence. So we're sitting in a position with our customers that's at the highest place that we've been from a sentiment perspective. And growth creates value when it generates attractive returns. And we remain focused on improving profitability while positioning the business for long-term success. We believe the actions we're taking today will strengthen our earnings power, it's going to expand our returns, and it will create long-term value for our shareholders. Look forward to speaking with you next time. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in J.B. Hunt Transport Services, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and J.B. Hunt Transport Services wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. J.B. Hunt (JBHT) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

J.B. Hunt Transport Services (JBHT) reported better-than-expected third-quarter revenue, but purchased transportation, fuel taxes, and insurance claims expenses weighed on the company's operating income margin, sending its shares down early Friday. Revenue climbed 20% to $3.68 billion, exceeding the FactSet-polled consensus of $3.59 billion. Per-share earnings came in at $1.82 for the quarter ended September, up from $1.76 the year before, the transportation and logistics company said late Thursday. Operating income as a percentage of revenue declined to 6.7% from 7.9% on a yearly basis due to higher purchased transportation, fuel and fuel taxes, and increased insurance claims expenses, according to the company. The stock decreased 1.3% in the most recent premarket activity. It's up about 21% year to date. Operating income rose 2% to $247.1 million, supported by higher revenue and improved productivity, though increased purchased transportation, equipment-related and driver personnel expenses partially offset the gains, J.B. Hunt said. "At an investor conference in September, we identified three primary cost headwinds this quarter: driver-related investments, volatile fuel prices, and higher claims and medical cost," Chief Financial Officer Brad Delco said during an earnings call, according to a FactSet transcript. "In total, these cost buckets, drive-related claims and fuel, impacted operating income by over $50 million versus the second quarter this year." In a client note last month, UBS Securities said J.B. Hunt was facing cost pressures that could weigh on its financial results for the back half of the year. Headwinds from fuel costs are likely to be temporary, while higher driver costs are expected to persist, the brokerage said at the time. "These pressures are either more cyclical or unpredictable than structural," Delco said, adding that they "reinforce the need to price our services for the value, capacity and reliability we deliver." Intermodal revenue rose 20% to $1.83 billion, lifted by an 11% gain in gross revenue per load, though per-load revenue excluding fuel surcharges rose just 2%. Dedicated contract services revenue rose 11% to $960.2 million as revenue per truck per week increased 10%. The integrated capacity solutions segment revenue surged 57% to $433.8 million as volume advanced 22% year over year, while truckload sales gained 37% to $260.8 million. Revenue in the final mile services segment decreased 3%. For the ongoing three-month period, J.B. Hunt projects capital expenditures to be higher than the $146 million spent in the third quarter, based "on a robust pipeline of dedicated opportunities," Delco told analysts on the call. The company is still targeting about $700 million in capital expenditures for the full year, the CFO added. Rivals C.H. Robinson Worldwide (CHRW) and Schneider National (SNDR) are scheduled to report their latest results later in October. Earlier this month, C.H. Robinson agreed to acquire RXO (RXO) in a cash-and-stock deal worth roughly $5.8 billion to create a more than $25 billion third-party logistics provider.