Knight-Swift (KNX) Q2 Earnings Beat, Revenues Decline Y/Y

Knight-Swift Transportation Holdings Inc.’s KNX second-quarter 2020 earnings (excluding 10 cents from non-recurring items) of 57 cents per share beat the Zacks Consensus Estimate of 35 cents. However, the bottom line dipped 1.7% year over year due to persistent weakness in the freight environment, aggravated by the coronavirus pandemic.

Meanwhile, total revenues of $1,060.7 million missed the Zacks Consensus Estimate of $1,078.6 million and fell 14.6% year over year with sluggish revenues at each of its three segments.

Total operating expenses declined 15.4% year over year to $958.53 million. Adjusted operating ratio (operating expenses as a percentage of revenues) improved to 87.6% from 87.8% in the year-ago quarter. Lower the value of the metric, the better. Knight-Swift’s adjusted operating income declined 9.5% year over year to $123.96 million.

This Zacks Rank #3 (Hold) company exited the second quarter with cash and cash equivalents of $117.76 million compared with $159.72 million at the end of 2019. During the first half of 2020, the company returned $27.7 million to its shareholders in the form of dividends and $34.6 million through share buybacks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Segmental Results

Revenues in the Trucking segment totaled (excluding fuel surcharge and inter-segment transactions) $816.03 million, down 9.4% year over year. Results were hampered by 6.5% decline in average revenue per tractor. Average revenue per tractor was weak in the quarter due to a 3.9% decrease in miles per tractor. Adjusted segmental operating income also dropped 7.9% to $118.17 million. Adjusted operating ratio (operating expenses as a percentage of revenues) improved 30 basis points (bps) to 85.5%.

Revenues in the Logistics segment (before inter-segment transactions) amounted to $67.07 million, down 16.5% year over year due to 14.2% decrease in brokerage revenues. While adjusted operating ratio deteriorated 180 bps to 95.5%, segmental operating income slumped 39.5% to $3.04 million.

Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $82.7 million, down 29.8% year over year as a result of load count and revenue per load declining 23.9% and 7.8% respectively. Segmental adjusted operating ratio deteriorated 890 bps to 105.3%. Segmental operating loss was $4.41 million, against operating income of $4.19 million in the year-ago period.

2020 Outlook

The company expects adjusted earnings per share in the band of $2.15-$2.30 for the full year. The Zacks Consensus estimate for the same stands at $1.74. Net capital expenditures are anticipated between $500 million and $525 million with deferral in certain investments. Previously, the same was expected in the range of $515-$540 million.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported second-quarter earnings numbers.

Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the quarter came in at $1,468 million, surpassing the Zacks Consensus Estimate of $1,400.8 million.

J.B. Hunt, carrying a Zacks Rank #3, reported second-quarter earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million also beat the Zacks Consensus Estimate of $2,060.9 million.

Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This Zacks Rank #3 company’s total revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.

Click Here, See It Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Kansas City Southern (KSU) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research