Hub Group, Inc. announced second quarter 2019 net income of $29.2 million, or diluted earnings per share of $0.87. Income from continuing operations for the second quarter 2018 was $17.2 million, or $0.51 per diluted share.  

Results of Continuing Operations
Revenue for the current quarter increased by 3% to $921.2 million compared with $894.7 million for the second quarter 2018 as a result of our success in providing multimodal solutions to our customers and the addition of the CaseStack business in December 2018.  Operating income for the current quarter increased 60% to $40.7 million versus $25.4 million for the second quarter 2018, primarily as a result of improved yield management and our intense focus on reducing costs while maintaining the highest levels of service. Operating margin expanded to 4.4% for the current quarter, as compared to 2.8% in the prior year quarter.
Second quarter intermodal revenue increased 1% to $542.9 million due primarily to a continued focus on yield management and enhanced efficiency, partially offset by a 7% decline in volume. Volume was down compared to the prior year due to a softening demand environment, increased truckload and intermodal competition, and a 2% volume decrease from lane cancellations and weather disruption. Intermodal gross margin increased compared to the second quarter of 2018 primarily due to our yield management strategy, improved efficiency and better purchasing, partially offset by decreased volumes and rail cost increases.
Truck brokerage revenue decreased 7% to $107.1 million in the second quarter of 2019 compared to the same quarter of last year.  Truck brokerage handled 18% more loads while fuel, price and mix combined were down 25% due primarily to the addition of the CaseStack LTL brokerage business.  Contractual truckload volume represented 86% of total truckload volume compared to 81% in the second quarter of 2018.   Truck brokerage gross margin increased due to a higher load count, further benefits from our new operating model and yield management strategy, as well as our new technology platform.    
Second quarter logistics revenue grew 15% to $193.5 million.  Revenue and gross margin expanded due to the addition of CaseStack, benefits from continuous improvements and cross selling to our customers and improved yield management.
Dedicated revenue increased 5% to $77.7 million compared to the same quarter in the prior year due to improved pricing and growth with new accounts which was offset partially by lost business.  Dedicated gross margin improved compared to the second quarter of 2018 due to implementation of our yield management processes and improved operational discipline.  We ended the quarter with approximately 1,300 tractors and 5,200 trailers for Dedicated.
Costs and expenses increased to $92.0 million in the second quarter of 2019 compared to $75.6 million in the second quarter of 2018 due primarily to costs and expenses of $12.7 million related to CaseStack (which includes $2.3 million of non-cash amortization expense), the absence of a $3.6 million Dedicated contingent earn out adjustment in the prior year, partially offset by a decrease of $1.0 million in compensation expense. Costs and expenses include a total of $3.4 million of non-cash amortization expense related to CaseStack and Hub Group Dedicated and $0.6 million of compensation expense associated with restricted stock issued to CaseStack management in connection with the acquisition.
Results of Discontinued Operations
Income from discontinued operations related to the sale of our Mode segment for the second quarter of 2018 was $4.9 million, or $0.15 per diluted share.
Cash Flow and Capitalization
Our capital expenditures for the second quarter 2019 totaled $11.7 million, primarily for tractors and technology investments.  At June 30, 2019, we had cash and cash equivalents of $150 million.   
2019 Outlook
We expect that our 2019 diluted earnings per share will range from $3.30 to $3.40. We estimate mid-single digit revenue growth for the full year. We expect gross margin as a percentage of sales to range from 13.9% to 14.3% in the second half of the year. We estimate our quarterly costs and expenses will range from $96 million to $98 million in the back half of the year.  We expect annual amortization expense associated with the CaseStack and Hub Group Dedicated acquisitions will be approximately $13.6 million and compensation expense related to restricted stock issued to CaseStack management in connection with the acquisition will be approximately $2.5 million in 2019. We project our effective tax rate for 2019 will range from 25% to 26%.  We forecast we will spend between $100 million and $110 million on capital expenditures in 2019.