Knight-Swift (KNX) Gains on Q3 Earnings Beat, Solid '21 EPS View
Knight-Swift Transportation Holdings Inc.’s KNX third-quarter 2021 earnings (excluding 7 cents from non-recurring items) of $1.30 per share surpassed the Zacks Consensus Estimate of $1.07. The bottom line surged 64.6% from the third-quarter 2020 figure, aided by higher revenues.
Expecting the favorable conditions to continue, the trucking company raised its earnings per share guidance for 2021. Adjusted earnings per share for the full year are now expected in the $4.50-$4.55 band (previous outlook: $3.90-$4.05). The Zacks Consensus Estimate for the same is currently pegged at $3.98 per share. The earnings beat and the improved outlook pleased investors, leading the stock to gain 7% on Oct 20 from Oct 19’s closing price of $50.75.
In the September quarter, total revenues of $1,642.4 million outperformed the Zacks Consensus Estimate of $1,546.5 million. The top line jumped 35.7% year over year, driven mainly by the huge increase in revenues in the Logistics segment.
Knight-Swift Transportation Holdings Inc. Price and EPS Surprise
KnightSwift Transportation Holdings Inc. price-eps-surprise | KnightSwift Transportation Holdings Inc. Quote
Total operating expenses (on a reported basis) surged 31.4% year over year to $1.37 billion. This increase was mainly due to the 39.8% escalation in fuel expenses as oil price moves north. Knight-Swift’s adjusted operating income rose 54.6% year over year.
Segmental Results
Revenues in the Truckload segment totaled (excluding fuel surcharge and inter-segment transactions) $933.21 million, up 3.4% year over year. Results were driven by a 6.8% increase in average revenue per tractor. Average revenue per tractor was strong in the quarter owing to a 24.9% increase in revenue per loaded mile (excluding fuel surcharge and intersegment transactions). Adjusted segmental operating income rose 22.3% to $206.8 million. Adjusted operating ratio (operating expenses as a percentage of revenues) improved 350 basis points to 77.8%.
Revenues in the Logistics segment (excluding inter-segment transactions) amounted to $221.37 million, up more than 100% year over year owing to the 60.3% increase in load count and a 43.1% rise in revenue per load. Adjusted operating ratio improved to 87.6% in the second quarter from 97.4% in the year-ago period. Segmental adjusted operating income surged more than 100% to $27.46 million.
Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $112.75 million, up 14.1% year over year. Persistent rail congestion and rail allocations induced a decline in load count but contributed to a 25.9% rise in revenue per load. Segmental adjusted operating ratio improved to 91.5% in the reported quarter from 99.7% in the year-ago quarter.
The Less-Than-Truckload (LTL) segment, which includes the results of ACT, a leading LTL carrier, acquired by Knight-Swift in July 2021, generated revenues (excluding fuel surcharges) worth $167.9 million in the September quarter. Segmental operating ratio (on an adjusted basis) was 87.5%.
Other Details
Knight-Swift, currently carrying a Zacks Rank #2 (Buy), exited the third quarter with cash and cash equivalents of $269.69 million compared with $156.70 million at the end of 2020. During the first nine months of 2021, the company returned $53.7 million to its shareholders in the form of share repurchases and $46.9 million as dividends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshots
Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported third-quarter 2021 results.
Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat the Zacks Consensus Estimate of $8,370.6 million.
J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.
Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.
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