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Knight-Swift (KNX) Benefits From Logistics Growth, Costs Ail

Knight-Swift Transportation Holdings’ KNX top line is benefiting from solid growth in its logistics segment. Additionally, the company’s upbeat earnings guidance for 2022 is encouraging.

Recently, the company reported second-quarter 2022 earnings (excluding 6 cents from non-recurring items) of $1.41 per share, which surpassed the Zacks Consensus Estimate of $1.35. The bottom line surged 43.9% from the second quarter of 2021, aided by higher revenues.

Total revenues of $1,961.1 million outperformed the Zacks Consensus Estimate of $1,790 million. The top line jumped 49.1% year over year.

 

KnightSwift Transportation Holdings Inc. Price, Consensus and EPS Surprise

KnightSwift Transportation Holdings Inc. Price, Consensus and EPS Surprise
KnightSwift Transportation Holdings Inc. Price, Consensus and EPS Surprise

KnightSwift Transportation Holdings Inc. price-consensus-eps-surprise-chart | KnightSwift Transportation Holdings Inc. Quote

How is Knight-Swift Doing?

Knight-Swift’s upbeat earnings per share guidance for 2022 looks encouraging. The company now expects adjusted earnings per share in the range of $5.30-$5.45 (previous guidance: $5.20-$5.40) for the current year. The bullish view is due to the company’s expectations of strong demand and capacity constraints in the truckload and LTL markets, which should drive truckload rates. The guidance is based on the assumptions of a year-over-year increase in LTL revenues, with improved margins in 2022, an increase in intermodal volumes and a stable truck count, among other factors.

A robust increase in revenues at the logistics segment is driving Knight-Swift’s top-line growth. In second-quarter 2022, revenues of the Logistics segment (excluding inter-segment transactions) totaled $247.32 million, up 52.5% year over year, owing to the 48.2% increase in load count and a 2.9% rise in revenue per load. Segmental adjusted operating income surged more than 200% to $44.1 million.

On the flip side, the company’s total operating expenses (on a reported basis) surged 45.4% year over year to $1.64 billion in second-quarter 2022. High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth.

Zacks Rank and Stocks to Consider

Currently, Knight-Swift carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Transportation sector are GATX Corporation GATX, Triton International Limited TRTN and Teekay Tankers Ltd. TNK, each carrying a Zacks Rank #2 (Buy).

GATX Corporation has an expected earnings growth rate of 17.8% for the current year. GATX delivered a trailing four-quarter earnings surprise of 28.9%, on average.

The Zacks Consensus Estimate for GATX’s current-year earnings has improved 2.1% over the past 90 days. Shares of GATX have gained 7.9% over the past year.

Triton has an expected earnings growth rate of 22.4% for the current year. TRTN delivered a trailing four-quarter earnings surprise of 7.5%, on average. TRTN has a long-term expected growth rate of 10%.

The Zacks Consensus Estimate for TRTN’s current-year earnings has improved 4.2% over the past 90 days. Shares of TRTN have increased 20.9% over the past year.

Teekay Tankers has an expected earnings growth rate of 140.1% for the current year. TNK delivered a trailing four-quarter earnings surprise of 46.1%, on average. TNK has a long-term expected growth rate of 3%.

The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have soared 120.3% over the past year.


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KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
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