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Hunt Transport Shares Tumble 12% on Q3 Earnings Warning

J. Hunt Transport Services stock fell 12% Wednesday after the carrier warned of near-term margin pressure in the third quarter. Company executives said cost gains are outpacing pricing increases, resulting in a 5% to 10% sequential EPS decline. Third-quarter EPS is expected to reach $1.77 at the midpoint, roughly 16% below analyst expectations. Hunt cited $25 million in incremental driver-related expenses and at least $10 million in sequential fuel headwinds. Diesel prices rose 10% sequentially from July through August and continued climbing in September, up in eight of eleven third-quarter weeks. Fuel surcharges operate on a one-week lag. Management emphasized the cost inflation is "more cyclical than structural." The intermodal and dedicated segments experience delayed rate capture. Intermodal pricing typically lags truckload by two quarters, while dedicated contracts feature annual cost-based escalators less sensitive to market swings. Hunt begins intermodal bid season in October, when roughly 10% of contracts renew. Management sees opportunity to narrow the current 32% intermodal-to-truck discount gap, though it won't implement out-of-cycle rate hikes to do so.