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Knight-Swift (KNX) Q3 Earnings & Revenues Beat Estimates

Zacks Equity Research
·5 min read

Knight-Swift Transportation Holdings Inc.’s KNX third-quarter 2020 earnings (excluding 8 cents from non-recurring items) of 79 cents per share surpassed the Zacks Consensus Estimate of 63 cents. Moreover, the bottom line surged 64.6% year over year owing to significant improvement in adjusted operating ratio (operating expenses as a percentage of revenues) in the Trucking segment.

Total revenues of $1,210.4 million beat the Zacks Consensus Estimate of $1,160.9 million and increased marginally year over year driven by increase in revenues in the Trucking and Logistics segment.

Total operating expenses declined 4.8% year over year to $1,044.9 million. Adjusted operating ratio improved to 83.9% from 89.6% in the year-ago quarter. Lower the value of the metric, the better. Knight-Swift’s adjusted operating income increased 61% year over year to $183.1 million.

Knight-Swift, sporting a Zacks Rank #1 (Strong Buy), exited the third quarter with cash and cash equivalents of $240.2 million compared with $159.72 million at the end of 2019. During the first nine months of 2020, the company returned $41.3 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 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 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) $902.6 million, up 3% year over year.

Results were driven by 5.4% increase in average revenue per tractor. Average revenue per tractor was strong in the quarter due to a 5.1% rise in revenue per loaded mile (excluding fuel surcharge and intersegment transactions). Adjusted segmental operating income also moved up 54.1% to $169.1 million. Adjusted operating ratio (operating expenses as a percentage of revenues) improved 620 basis points (bps) to 81.3%.

Revenues in the Logistics segment (before inter-segment transactions) amounted to $96.2 million, up 15.1% year over year due to 18.2% increase in brokerage revenues. While adjusted operating ratio deteriorated 180 bps to 97.4%, segmental operating income slumped 32.9% to $2.5 million.
Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $98.8 million, down 9.1% year over year as a result of declining load count and revenue per load by 5.7% and 3.7%, respectively. Segmental adjusted operating ratio surged 270 bps to 99.7%. Segmental operating income was $0.25 million, against operating loss of $2.65 million in the year-ago period.

2020 Guidance

The company expects adjusted earnings per share in the band of $2.68-$2.72 (previously $2.15-$2.30) for the full year 2020. The Zacks Consensus Estimate for the same stands at $2.32. Moreover, the company expects adjusted earnings per share in the band of $3.20-$3.40 for full year 2021. The Zacks Consensus estimate for the same stands at $2.78.

Net capital expenditures are anticipated between $380 million and $405 million. Previously, the same was expected in the range of $500-$525 million.

Sectorial Snapshot

Apart from Knight-Swift, let’s take a look into some other Zacks Transportation sector’s third-quarter earnings like Delta Air Lines DAL , J.B. Hunt Transport Services JBHT and  United Airlines Holdings, Inc. UAL .

Delta incurred a loss (excluding $5.17 from non-recurring items) of $3.30 per share in the September quarter, wider than the Zacks Consensus Estimate of a loss of $3.14. Meanwhile, Delta reported earnings of $2.32 per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time.

J.B. Hunt reported mixed third-quarter 2020 results, with earnings missing estimates and revenues beating the same. Quarterly earnings of $1.18 per share fell short of the Zacks Consensus Estimate of $1.26. Moreover, the bottom line declined 15.7% year over year due to disappointing performance of its intermodal (JBI) unit. Total operating revenues increased 4.6% to $2,472.5 million. Revenues also beat the consensus mark of $2,345.2 million.

United Airlines incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share, wider than the Zacks Consensus Estimate of a loss of $7.63. Results were hurt by the coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $2,489 million slumped 78.1% year over year and also lagged the Zacks Consensus Estimate of $2,570.1 million. This year-over-year plunge was due to 84.3% drop in passenger revenues to $1,649 million.

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