Hub Group, Inc. has recently released its 10-Q report, providing insights into its financial performance and operations. Hub is a leading supply chain solutions provider in North America, offering comprehensive transportation and logistics management services. The company's services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, and dedicated and regional trucking, as well as final mile, railcar, small parcel, and international transportation. Additionally, Hub provides logistics services such as full outsource logistics solutions, transportation management, freight consolidation, warehousing and fulfillment, and parcel and international services. The company owns approximately 50,000 dry, 53-foot containers, as well as 900 refrigerated and 53-foot containers, and serves a diverse customer base in industries including retail, consumer products, and durable goods.
In its 10-Q report, Hub Group, Inc. highlighted its financial condition and results of operations. The company's total operating revenue decreased by 5% to $986 million in the three months ended June 30, 2024, from $1.04 billion in the same period in 2023. The Intermodal and Transportation Solutions (ITS) segment's revenue decreased by 9% to $561 million, primarily due to lower fuel revenue, lower accessorial revenue, and price declines. The Logistics segment's revenue increased by 1% to $459 million, primarily due to the recent acquisition in final mile, partially offset by lower revenue in the brokerage service line and consolidation and fulfillment service lines.
Hub Group, Inc. reported a total operating income of $39.5 million for the three months ended June 30, 2024, compared to $62.1 million in the same period in 2023. The ITS segment's operating income decreased to $13.6 million, 2.4% of revenue, from $31.8 million, 5.2% of revenue, in the prior year, while the Logistics segment's operating income decreased to $25.9 million, 5.6% of revenue, from $30.3 million, 6.7% of revenue, due to lower brokerage margins, partially offset by the recent acquisition in final mile.
The company's operating expenses, including purchased transportation and warehousing, salaries and benefits, depreciation and amortization, insurance and claims, and general and administrative expenses, were closely monitored. Purchased transportation and warehousing costs decreased by 5% to $727 million in 2024 from $764 million in 2023, while salaries and benefits remained consistent at $142 million in both years, with an increase of $10 million primarily due to the acquisition of Forward Air Final Mile (FAFM) on December 20, 2023. Depreciation and amortization expense increased to $38 million in 2024 from $35 million in 2023, primarily due to the amortization of intangibles related to the acquisition of FAFM. Insurance and claims expense increased to $13 million in 2024 from $12 million in 2023, primarily due to increased auto liability expense related to claim costs. General and administrative expenses increased to $28 million in 2024 from $27 million in 2023, primarily due to the acquisition of FAFM, as well as increases in use tax expense and legal expense.
Hub Group, Inc. provided insights into uncertainties and risks to its outlook, including inflation, increased healthcare costs, a slowdown in consumer spending, a shift by consumers to spending on services at the expense of goods, and aggressive pricing actions by competitors, which could have a materially negative impact on the company's revenue, profitability, and cash flow in 2024. However, the company also highlighted potential positive impacts on its revenue, profitability, and cash flows in 2024, such as the exiting of truckload capacity, a return of typical shipping peak season demands, and a stronger used tractor market.
Today the company's shares have moved -7.9% to a price of $42.53. If you want to know more, read the company's complete 10-Q report here.
