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Knight-Swift's (KNX) Q1 Earnings Miss Estimates, Down Y/Y

Knight-Swift Transportation Holdings (KNX) reported disappointing first-quarter 2023 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.

Quarterly earnings (excluding 9 cents from non-recurring items) of 73 cents per share missed the Zacks Consensus Estimate of 83 cents and fell 45.9% year over year.

Total revenues of $1,636.9 million also underperformed the Zacks Consensus Estimate of $1,656.3 million. The top line plunged 10.4% year over year.

Total operating expenses (on a reported basis) dropped 2.4% year over year to $1.49 billion. Knight-Swift’s adjusted operating income fell 1.4% year over year.

Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise

Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise

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

Segmental Results

Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $865.98 million, down 8% year over year. Results were hurt by a 9% decrease in average revenue per tractor. Adjusted segmental operating income fell 43.4% to $116.2 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 840 basis points (bps) to 86.6%.

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The Less-Than-Truckload (LTL) segment  generated revenues (excluding fuel surcharges) worth $213.9 million in the March quarter, down 0.3% year over year. Adjusted segmental operating income grew 0.6% to $30.5 million. Adjusted operating ratio (operating expenses as a percentage of revenues) fell 20 bps to 85.7%.

Revenues from Logistics (excluding inter-segment transactions) amounted to $136.8 million, down 51.2% year over year, owing to a 36.4% decrease in revenue per load. Segmental adjusted operating income decreased 67.1% to $13.15 million. Adjusted operating ratio surged 470 bps to 90.4%.

Intermodal revenues (excluding inter-segment transactions) totaled $110.6 million, up 1.3% year over year. Segmental operating ratio (on a reported basis) surged to 95.4% in the reported quarter from 86.1% in the year-ago quarter.

Liquidity, Dividends & Buyback

Knight-Swift exited the first quarter with cash and cash equivalents of $191.2 million compared with $196.7 million at the end of December 2022. Additionally, long-term debt (excluding current maturities) of $1.02 billion remained flat sequentially.

2023 Guidance

For the ongoing year, Knight-Swift expects adjusted earnings per share in the range of $3.35-$3.55 (earlier view: $4.05-$4.25). The Zacks Consensus Estimate of $3.91 lies above the updated guidance.

KNX still expects net cash capital expenditures for 2023 in the band of $640-$690 million. The tax rate is still expected to be 25% for 2023.

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.

Q1 performance of Some Other Transportation Companies

J.B. Hunt Transport Services, Inc.’s JBHT first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.

JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), respectively.

A decline of 17% in revenue per load in Truckload (JBT) also added to the woes. Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%. JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.

Delta Air Lines’ DAL first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel price and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.

DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.

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