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Knight-Swift (KNX) Q4 Earnings Beat Estimates, Rise Y/Y

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Knight-Swift Transportation Holdings Inc.’s KNX fourth-quarter 2020 earnings (excluding 10 cents from non-recurring items) of 94 cents per share surpassed the Zacks Consensus Estimate of 91 cents. Moreover, the bottom line surged 70.9% year over year owing to significant improvement in adjusted operating ratio (operating expenses as a percentage of revenues) in all the segments (Trucking, Logistics and Intermodal).

Total revenues of $1,278 million beat the Zacks Consensus Estimate of $1,275.9 million and increased 6.8% year over year driven by increase in revenues in the Trucking, Logistics and Intermodal segment.

Total operating expenses dropped 1.3% year over year to $1,083.3 million. Adjusted operating ratio improved to 82% from 87.8% in the year-ago quarter. Lower the value of the metric, the better. Knight-Swift’s adjusted operating income increased 64.4% 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

Knight-Swift, carrying a Zacks Rank #3 (Hold), exited the fourth quarter with cash and cash equivalents of $156.7 million compared with $159.72 million at the end of 2019. During 2020, the company returned $233.8 million to its shareholders in the form of dividends and through share buybacks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Segmental Results

Revenues in the Trucking segment totaled (excluding fuel surcharge and inter-segment transactions) $940.9 million, up 9.2% year over year. Results were driven by 10.5% increase in average revenue per tractor. Average revenue per tractor was strong in the quarter owing to 13.8% rise in revenue per loaded mile (excluding fuel surcharge and intersegment transactions). Adjusted segmental operating income also moved up 63.9% to $195 million. Adjusted operating ratio (operating expenses as a percentage of revenues) improved 690 basis points (bps) to 79.3%.

Revenues in the Logistics segment (excluding inter-segment transactions) amounted to $125 million, up 34.8% year over year due to 37.7% increase in brokerage revenues. Both adjusted operating ratio improved 180 bps to 91.2% and segmental operating income climbed 69.5% to $11 million.

Revenues in the Intermodal segment (excluding inter-segment transactions) totaled approximately $115 million, up 2.8% year over year as a result of increasing load count and revenue per load by 0.4% and 2.4%, respectively. Segmental adjusted operating ratio improved 470 bps to 94.8%. Segmental operating income was $6 million in the quarter, up more than 100% year over year.

2021 Guidance

The company still expects adjusted earnings per share in the band of $3.20-$3.40 for full year 2021. The midpoint ($3.30) of the guidance is below the Zacks Consensus Estimate of $3.34.

Net capital expenditures are anticipated between $450 million and $500 million.

Sectorial Snapshots

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.

United Airlines UAL incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Further, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million.

J.B. Hunt Transport Services JBHT reported earnings of $1.44 per share, which beat the Zacks Consensus Estimate of $1.27. Total operating revenues of $2,737.7 million also surpassed the Zacks Consensus Estimate of $2,514.3 million.

Delta Air Lines DAL incurred a loss (excluding $1.34 from non-recurring items) of $2.53 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $2.43. Total revenues of $3,973 million topped the Zacks Consensus Estimate of $3,754.5 million.

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