Moody's raises key JB Hunt debt rating
NEW YORK (AP) — Moody's Investors Service on Wednesday raised its senior unsecured debt rating for JB Hunt Transport Services Inc. to "Baa2" from "Baa3," citing the trucking company's strong cash flows and moderate amount of debt.
The ratings service also boosted the JB Hunt's short term rating to "P-2" from "P-3. The ratings outlook is "stable."
Moody's noted that the Lowell, Ark.-based company had just $580 million of funded debt as of June, which represents 17 percent of its revenue. It also pointed to the "strong and stable" revenue and profit supplied by the company's growing intermodal and dedicated contract service businesses.
Moody's said that the intermodal part of the North American freight transportation market has shown more favorable growth trends than the overall market, which should give JB Hunt a boost as that part of the market continues to expand.
In addition, JB Hunt has expanded its dedicated contract service business with long-term contracts with key customers that provide profit stability. Combined, the two businesses account for over 80 percent of revenue, and also boast strong and stable profit margins, Moody's said.
JB Hunt shares rose $1.07, or 2.1 percent, to $52.27 in afternoon trading.