Why Is Knight-Swift (KNX) Up 0.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Knight-Swift Transportation Holdings (KNX). Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Knight-Swift due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Miss in Q4
Knight-Swift's fourth-quarter 2023 earnings of 9 cents per share missed the Zacks Consensus Estimate of 47 cents and declined 91% year over year. Total revenues of $1,931.9 million outperformed the Zacks Consensus Estimate of $1,922 million and improved 0.5% year over year.
Total operating expenses (on a reported basis) increased 24.2% year over year to $1.91 billion.
Knight-Swift’s adjusted operating income fell 78.6% year over year.
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1,155.72 million, up 25.5% year over year. Adjusted segmental operating income plunged 56.2% to $69.94 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 1120 basis points (bps) to 93.9%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $232.08 million in the fourth quarter, up 13.8% year over year. Adjusted segmental operating income grew 14% to $33.7 million. Adjusted operating ratio remained flat at 85.5%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $164.54 million, down 5% year over year. Adjusted operating income decreased 51.9% to $11.27 million. The adjusted operating ratio rose 670 bps to 93.1%.
Intermodal revenues (excluding inter-segment transactions) totaled $94.43 million, down 16.4% year over year. The operating ratio (on a reported basis) soared to 104.7% from 94.7% in the year-ago quarter.
Liquidity
Knight-Swift exited the fourth quarter with cash and cash equivalents of $168.55 million compared with $193.37 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.22 billion compared with $1.26 billion at the end of prior quarter.
Guidance
Knight-Swift expects first-quarter 2024 adjusted earnings per share (EPS) in the range of 37-41 cents and second-quarter 2024 EPS in the range of 53-57 cents. KNX expects net cash capital expenditures for 2024 in the $625-$675 million band. The tax rate is expected to be around 25-26% for 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -18.81% due to these changes.
VGM Scores
At this time, Knight-Swift has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Knight-Swift has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Knight-Swift belongs to the Zacks Transportation - Truck industry. Another stock from the same industry, JB Hunt (JBHT), has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
JB Hunt reported revenues of $3.3 billion in the last reported quarter, representing a year-over-year change of -9.5%. EPS of $1.47 for the same period compares with $1.92 a year ago.
JB Hunt is expected to post earnings of $1.60 per share for the current quarter, representing a year-over-year change of -15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for JB Hunt. Also, the stock has a VGM Score of B.
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Knight-Swift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
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