Hub Group cuts forecast as truck brokerage slows, shares down

Stock Market Predictions

(Global Markets) - Shares of Hub Group Inc (HUBG.O) fell as much as 13 percent on Friday after the freight management company posted a lower-than-expected quarterly profit and cut its full-year earnings forecast, citing slowing growth at its truck brokerage business.

Truck brokerage revenue in the second quarter fell 11 percent to $80 million. The segment accounted for about 13 percent its total revenue in the quarter.

"We haven't lost any share there (truck brokerage business); it's just that the projects are much smaller than they were the prior year," Chief Executive David Yeager said on a conference call with analysts.

The company cut its full-year earnings forecast to between$1.80 and $1.90 per share from between $1.89 and $2.10 per share, prompting at least two brokerages to cut their rating on the stock.

KeyBanc Capital Markets downgraded Hub Group to "hold" from "buy," citing a "longer and greater-than-anticipated" earnings impact from the brokerage turnaround and a potentially slower freight environment going forward.

Raymond James cut its rating on Hub Group to "market perform" from "outperform".

Hub Group shares, which have shed 10 percent of their value in the last three months, were down 9 percent at $28.96 in morning trade on the Nasdaq. They touched a low of $27.86 earlier in the session.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Supriya Kurane)