Soft First Quarter Guidance Sinks Hub Group Inc (HUBG)

Hub Group Inc (NASDAQ:HUBG) shares have sunk 14% in afternoon trading after the company announced somewhat disappointing Q1 earnings expectations. For the time period, Hub Group management expects diluted EPS of $0.30-$0.32 when factoring a one time cost of $1.5 million for due diligence and severance expenses, versus the Street consensus of $0.45 per share. EPS was disappointing due to soft pricing caused by excess truck capacity and extraordinarily aggressive intermodal pricing.

Hub Group Inc (NASDAQ:HUBG) CEO Dave Yeager said, “We believe the current intermodal pricing environment is an aberration that will improve as truck capacity becomes tighter and pricing becomes more rational. Intermodal will always be a major part of Hub’s business. But through diversification, the inevitable cyclical rise and fall of intermodal prices will have less of an impact on earnings. We are working diligently to further diversify our product offerings through acquisitions.”

In addition to releasing EPS expectations, Hub also expects sales to grow 10-12% year-over-year for the first quarter. The company does maintain its full year 2017 diluted EPS outlook of $1.60-$1.80, however.

What Does The Smart Money Sentiment Say?

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Of the 742 elite funds we track, 16 funds owned $316.41 million of Hub Group Inc (NASDAQ:HUBG) and accounted for 21.40% of the float on December 31, versus 21 funds and $286.59 million respectively on September 30. Ken Fisher‘s Fisher Asset Management trimmed its stake by 4% to 1.48 million shares.

The Bottom Line

Hub Group Inc (NASDAQ:HUBG) shares are lower due to disappointing first quarter guidance. For more reading, check out ‘10 Biggest Trucking Companies In the World‘.

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