• Full Year Revenue: $4 billion, a 6% decrease over the prior year.
• Fourth Quarter Revenue: $1 billion, a decline of 1% year-over-year.
• Intermodal Volume Growth: 14% year-over-year increase in the fourth quarter.
• Revenue per Load: Declined 9% year-over-year, but up 4% sequentially.
• Adjusted Operating Income Margin: 3.9% for the fourth quarter, a 40 basis point increase year-over-year.
• Adjusted EPS: $0.48 for the fourth quarter; $1.91 for the full year.
• Adjusted Cash EPS: $0.59 for the fourth quarter; $2.34 for the full year.
• Cash and Cash Equivalents: $127 million at year-end.
• Capital Expenditures: $51 million for the full year.
• EBITDA less CapEx: $298 million for the full year, a 16% increase over the prior year.
• Net Debt: $167 million with a leverage ratio of 0.5 times.
• Shareholder Returns: Nearly $100 million returned through dividends and stock repurchases in 2024.

• Warning! GuruFocus has detected 4 Warning Sign with HUBG.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hub Group Inc (NASDAQ:HUBG) achieved a year-over-year improvement in adjusted operating margins in the fourth quarter.
• Intermodal volumes increased by 14% year over year in the fourth quarter, with significant growth in Mexico.
• The company returned nearly $100 million to shareholders through share repurchases and dividends.
• Hub Group Inc (NASDAQ:HUBG) completed its warehouse network alignment, improving service and costs.
• The company has a strong pipeline of opportunities and is focused on driving growth in 2025.

Negative Points

• Revenue per load declined 9% year over year due to headwinds related to mix fuel and pricing.
• Logistics revenue was slightly down compared to the prior year due to lower revenue in brokerage and managed transportation businesses.
• Purchase transportation and warehousing costs were high, although they decreased from the prior year.
• Salaries and benefits increased by $13 million due to the Final Mile and EASO transaction.
• Hub Group Inc (NASDAQ:HUBG) reported a 6% decrease in full-year revenue compared to the prior year.

Q & A Highlights

Q: Can you provide guidance on how the year will shape up, particularly regarding Q1 compared to Q4? A: Kevin Beth, CFO, explained that while they don't provide quarterly guidance, they expect Intermodal volume to be comparable to Q4, with increases in Logistics segment operating income due to network alignment. However, these are offset by lower Intermodal peak season surcharges and seasonal decreases in Final Mile business, along with increased compensation, taxes, and insurance costs. EASO is included in Intermodal volume, but only 51% contributes to EPS. They expect a better-than-normal seasonal EPS step-down compared to the last two years.

Q: How do you see Intermodal margins and pricing evolving throughout the year? A: Phillip Yeager, CEO, noted that while it's early in the bid season, they are in a good position. Customers are pulling forward bids to lock in lower rates, indicating a potential pricing environment turn. They anticipate low single-digit price increases in Intermodal, ramping throughout the year, embedded in their guidance.

Q: Can you elaborate on the logistics margin expansion from restructuring activities in Q3 and Q4? A: Kevin Beth, CFO, confirmed they expect a 100-basis point improvement based on the Q3 run rate. They anticipate slightly overachieving cost savings, with a ramp-up as the year progresses. There is potential for further improvement if brokerage momentum continues.

Q: How is the M&A pipeline looking, and will it be a significant capital use? A: Phillip Yeager, CEO, stated they have a good pipeline and expect an active year for M&A, focusing on non-asset logistics segments and opportunistic asset-based offerings. They aim to build scale, differentiation, and broaden their customer base for cross-selling opportunities.

Q: Are you seeing any demand pull forward in Intermodal volumes, and how does it affect your outlook? A: Phillip Yeager, CEO, mentioned continued strong demand off the West Coast, with volumes up significantly year-over-year. While some pull forward is expected to ensure supply chain fluidity, no major changes are anticipated from customers at this point.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.