Third quarter earnings for the nation’s trucking companies began rolling in on Monday, following reports of lowered expectations as several negative factors weigh on the nation’s freight markets.

J.B. Hunt Transport Services Inc. (NASDAQ:JBHT) reported net earnings slipped to $109.4 million, or 97 cents per share, compared to $115.1 million, or 99 cents per share, a year earlier.

Total operating revenue for the most recent quarter was $1.69 billion, compared with $1.59 billion for the third quarter 2015. This topped a consensus estimate by analysts survey by Zacks Investment Research, but the per-share performance was 5 cents less than expected.

Operating income for the current quarter totaled $183 million compared $194 million for the third quarter 2015. The Arkansas-based company attributed the decline mainly to lower customer rates in its intermodal, brokerage and trucking segments, increased rail purchase transportation rates, lower box turns, increases in driver wages and recruiting costs, losses on the sale of used equipment, increased legal and consulting costs, and higher equipment maintenance and ownership costs.

J.B. Hunt’s intermodal segment, which makes up nearly two-thirds of its operating income, saw revenue increase 2% in the third quarter from a year ago to $970 million as its operating income fell 7% to $116.9 million. This happened despite overall volume increasing 7%. Revenue per load fell 4.2% including fuel surcharges. Revenue per load excluding fuel surcharges fell 2%.

The company’s dedicated operations saw revenue increase 6% to $394 million as operating income moved 16% higher to $52.5 million. This was attributed to a near 3% increase in revenue per truck per week, including fuel surcharge. Without the fuel surcharge the hike was approximately 4%. The dedicated operation has added 205 trucks to its operations over the past year, including 50 in the second quarter.

“Approximately 75% of these additions represent private fleet conversions versus traditional dedicated capacity services and primarily reflect new contract implementations in this and prior periods,” the company said. “Customer retention rates remain above 98%.”

Brokerage operations reported revenue of $233 million, up 35% from the third quarter of 2015, while operating income fell 26% to $8.5 million. The latter was blamed for gross profit falling to 12.8% versus near 16% a year ago, while the company added more personnel to the operation.

“Load volume increased 88% while revenue per load decreased 28.5% due to lower fuel prices, freight mix changes driven by customer demand and lower customer rates on contractual business,“ the company said.

J.B. Hunt’s truck operation saw little change in revenue at $97 million, but its operating income fell considerably, 55% to $5.1 million.

“Revenue excluding fuel surcharge increased 2%, primarily from a 4% increased truck count and a 2% increase in utilization offset with an approximate 4% decrease in rate per mile excluding fuel mostly from customer driven freight mix changes,” the company said, while core customer rates were unchanged.

At the end of the third quarter, the trucking segment operated 2,183 tractors compared to 2,100 a year ago.

Third Quarter Expectations Less Than Stellar

There are expectations that many trucking companies will report some level of decline in third quarter profits compared to a year ago.

Covenant Transportation Group Inc. last week said its earnings could be more than 50% lower than expectations from analysts. It said earnings per share should be between 12 cents and 17 cents, compared to one consensus forecast of 25 cents, and well below the 42 cents per share reported in the third quarter of 2015.

Earlier this month, Universal Logistics Holdings Inc. warned its third quarter earnings could be as much as 50% lower than a year earlier. And in September Forward Air Corp. lowered its guidance for both adjusted income and revenue.

The situation is being driven by a “strong dollar, low energy prices with an upward bias, declining inventories but still pockets of overstocking/bloating, mediocre consumer spending, and weak capital investment," said the investment firm Stifel in an analyst research note recently.

It said while truckload spot market pricing has bounced slightly off the bottom, the contract pricing environment remains highly competitive. Even in the less-than-truckload sector spot market pricing remains soft, though contract pricing is up modestly up over the past year.

Stifel noted trucking is facing headwinds from intermodal. Truckload pricing pressure has mounted as the truckload spot market has weakened and fuel prices have remained relatively low.