Hub Profit Falls 45 Percent

Intermodal firm Hub Group’s 45 percent drop in net profit, to $8.3 million, still left it with “respectable returns even in this difficult freight environment” for all its lines of business, said Chairman and CEO David. P. Yeager.

Hub saw top-line revenue fall 26 percent in the second quarter to $363 million, and gross margin on its services after subtracting transportation costs was down 24 percent to $46 million.

Sales from its single-largest line, intermodal shipments, fell 28 percent to $254 million, which Hub said came from a 10 percent drop in traffic along with an 18 percent fall in revenue from fuel surcharges.

A year ago, freight handlers were charging higher fees as fuel prices ran up to historic heights, but those surcharges have come down sharply after fuel costs plunged in the wake of last fall’s economic collapse.

Hub’s truck brokerage business also saw revenue decline 28 percent, to $72 million, while logistics sales slipped just 9 percent to $37 million.

Analyst John Larkin of Stifel Nicolaus liked the results, saying Hub is employing “effective cost control.” He said it also has a debt-free balance sheet and ended the quarter with $113 million in cash, and “is actively seeking acquisition targets.”

Contact John D. Boyd at jboyd@joc.com.