Jim Cramer - Mad Money J.B. Hunt Transport Servces JBHT-Q DON'T BUY Jul 17, 2024

It was expected that earnings would be awful--and were. Management was not confident at all about its outlook. They're feeling the pain of a freight recession.

They reported a mixed quarter last night: slight beat in sales due to strength in intermodal business, but a big earnings miss. Yet, it opened higher this morning. The freight market has been horrible the past two years. Hunt's CEO however made encouraging comments about intermodal shipping (half of JBHT's business), citing volume increases last October-December of 6-8% monthly, with an uptick at the end of the year. Rising volumes will eventually trickle to the bottom line. Skeptics note that disruptions in Red Sea shipping benefitted Hunt. The CEO says he doesn't know the impact of the Red Sea yet. Earnings missed because of $53 million of higher costs (rocketing insurance rates). Verdict: the turn in trucking is just beginning and needs time to play out. Also rising freight costs will make it harder for the Fed to cut interest rates. But when the business cycle starts rolling, you can make great money from the trucking stocks.

They report Thursday. He likes it. It's a barometer of the economy. Watch their report.