Hub Group’s Q1 revenue declines 8% to $915M

Hub Group posted an 8% year-over-year decrease in total revenue in the first quarter, to $915.2 million. It cited lower demand and declines in intermodal revenue per load.

The transportation provider reported first-quarter earnings per share of 44 cents, in line with EPS in the same year-ago period.

“Our customers have taken different approaches to managing through the implementation of tariffs, with the majority taking a wait-and-see approach, while others pulled forward inventory depending on their end markets, product types and origin of their finished goods,” Phil Yeager, Hub Group’s president and CEO, said during the earnings call Thursday. “It remains unclear what the near- and long-term impacts will be as many of our customers have diversified their vendor base and supply chains to ensure fluidity through these potential disruptions.”

Oak Brook, Illinois-based Hub Group (NASDAQ: HUBG) is a provider of transportation and logistics management solutions.

Hub Group missed Wall Street expectations on revenue of $966 million but beat EPS predictions of 42 cents per share.

The company lowered its full-year 2025 outlook, with adjusted earnings per share ranging from $1.75 to $2.25. Full-year revenue is anticipated at $3.6 billion to $4 billion.

Hub Group’s previous full-year 2025 outlook called for an EPS range of $1.90 to $2.40 and revenue of $4 billion to $4.3 billion.

CFO Kevin Beth said the low end of the company’s outlook range for 2025 would be due to an extended slowdown in imports of China imports and/or a weakening of consumer spending.

“Our assumptions at the high end of the range include either a short West Coast slowdown of China imports or a strong bounce-back of demand in the West Coast, leading to a surge of volume in the back half of the year that allows for increased pricing for peak-season surcharges,” Beth said.

Hub Group’s first-quarter intermodal and transportation solutions segment revenue was $530 million, as compared with $552 million in the prior year. 

Yeager said the company has not seen any significant West Coast drop in volume yet, as imports from China slowed down due to the impact of tariffs.

“We haven’t seen the slowdown that is obviously much anticipated, but at this point, not showing up in our data,” Yeager said. “We think that’s going to be varying by customer and how much they’ve pulled forward, how much seasonal products they have, how much diversification in their sourcing strategy they’ve been able to execute on. As far as exposure with China, about 25% of our West Coast volume is port-related, 30% of that coming from China.”

The logistics segment revenue was $411 million, a 14% year-over-year decrease due to lower volume and revenue per load in the company’s brokerage business.

“In logistics, our operating margin percentage improved 70 basis points year over year due to improved efficiency in our facilities as well as the completion of the network alignment initiative that was offset by lower margins in our brokerage,” Yeager said. “We experienced a larger decline in revenue at brokerage due to limited spot market opportunities and declining rates as well as a negative mix.”

Company officials said they saw seasonal softness in their managed transportation and final-mile businesses. 

Hub Group expects capital expenditures in the range of $40 million to $50 million for the full year.

Beth said the company will likely buy new tractors but no new containers in 2025.

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