JBHT faces near-term pressure from a Q3 earnings guidance cut of 5-10% due to rising fuel and driver costs, partially offset by pricing power from tight capacity.

Yeah, JB Hunt is uh under pressure on the move this morning, down more than 11% and this is off the back of a rare warning here. They're expecting uh third quarter earnings to decline 5 to 10% which would from the second quarter.

They warned about u rapid uh pressure from fuel prices. They're expected to create a roughly $10 million headwind compared to the second quarter. Um they also talked about labor costs, right?

Driver related costs are expected to increase and could add another 25 million in sequential costs.

We're talking about um both recruiting and retaining drivers. They talked about both the onboarding, training, and signing bonuses.

They said that intermodal demand is very strong. Um there is been a shortage of truck drivers and that's limiting highway capacity. So there is this uh expectation that their labor costs will rise.

So that's one of the headwinds around the company.

But tighter trucking capacity gives them greater pricing power. That's one of the um pluses here. At the same time again we've been talking about the impact of fuel prices and diesel prices and you can see this playing out real time with regard to their warning here about where earnings are expected to come in.

So now coming into today this was an outperformer whether we're talking about year to date or year overyear but we certainly are seeing a reset of valuations from a year Nicole.