J. B. Hunt Transport Services Inc., announced second quarter 2003 net earnings of $25.1 million, compared with 2002 second quarter earnings of $15.5 million.

Total operating revenue for the current quarter was $600 million, compared with $557 million during the second quarter of 2002.
During the second quarter of 2003, revenues of the company's Truck segment fell 2%, while the Intermodal segment revenue rose 14% over the comparable period of 2002. Dedicated segment (DCS) revenue increased 12% during the current quarter.
"Earnings improved significantly in the quarter as the operating ratios in each of our three operating segments showed substantial improvement," said Kirk Thompson, president and chief executive officer. "Given the success over the past nine quarters at improving the Truck operating ratio relative to the comparable period, the obvious attainment of a new level of profitability in our Intermodal operations, and the return to a more normalized profitability of our DCS group, we are extremely pleased with the progress at delivering the profitability improvement we had anticipated and remain confident in our ability to achieve meaningful earnings growth and shareholder returns going forward.
"While the improvement is gratifying, we are still short of our profitability goals of 90% or better operating ratios in each of the segments. We will continue to press on toward those goals."
The Truck operating ratio was 94.0% for the quarter, an 80 basis point improvement versus the comparable period last year. Revenue for the Truck segment declined to $208 million from $212 million as the truck fleet was reduced by about 300 units versus the same quarter a year ago. The improvement in the Truck business segment continues a trend of reaching the company's stated objective of returning to acceptable margins. Net revenue (excluding fuel surcharges) per tractor per day improved to $541 or 1% over the second quarter of 2002, in spite of a decline in miles per tractor. Contributing to the decline in miles was the continuing slowness of the economy, particularly after the Easter holiday.
Utilization of tractors, as measured by miles per truck per day, continued to be less than acceptable due to the lackluster economy. However, rate yields continued to improve as the loaded rate per mile (excluding fuel surcharges) increased 5.1% relative to a year ago. The end of June generated a spike in demand to the point that extra empty miles were incurred to provide needed capacity to some customers. Thus, the combination of sagging post-Easter demand and the increase in empty miles driven to reposition equipment to provide service to customers near the end of the quarter drove empty miles up slightly to 10.0% vs. 9.1% for the second quarter a year ago.
The higher rates are a result of the company's yield management initiatives and price increases implemented to address the higher costs affecting the truckload industry. One of the significant cost increases that has plagued the trucking industry in recent months has been the spike in insurance and claims costs. Reflecting the significant risk associated with operating a large fleet of trucks on America's congested highways, our Truck segment incurred a 59% increase in insurance and claims cost during the quarter relative to a year ago.
Better returns in the Truck segment are a prerequisite for re-investment in the truckload business. The company has no plans to add capacity in the Truck segment until satisfactory margins are achieved. The average number of trucks was 5,610 for the second quarter of 2003 and 5,902 for the second quarter of 2002.