|Bid||0.00 x 800|
|Ask||0.00 x 800|
|Day's Range||38.44 - 41.93|
|52 Week Range||27.54 - 47.44|
|Beta (5Y Monthly)||1.32|
|PE Ratio (TTM)||23.60|
|Earnings Date||Oct 21, 2020|
|Forward Dividend & Yield||0.32 (0.81%)|
|Ex-Dividend Date||Sep 03, 2020|
|1y Target Est||51.44|
The nation's largest truckload (TL) carrier, Knight-Swift Transportation (NYSE: KNX), on Wednesday posted third-quarter results closer to what analysts and onlookers were anticipating.After a couple of lackluster third-quarter reports from TL carriers, Knight-Swift reported a third-quarter beat and a 2020 guidance raise, and it didn't contain its exuberance over current TL market fundamentals, issuing better-than-expected full-year 2021 guidance. Usually carriers wait until the release of fourth-quarter results in January and February before providing the new year's guidance.The Phoenix-based company cited the expectation for "strong freight conditions to continue" as a basis for issuing full-year 2021 adjusted earnings per share (EPS) guidance of $3.20 to $3.40 a full three months ahead of schedule. The outlook compares favorably to the current consensus estimate of $2.90, which increased several times heading into the Wednesday print.The report also pointed to "inventory restocking" and "low double-digit contract rate increases" during 2021 as supportive of expectations. The carrier did caution that headwinds around recruiting and retaining drivers "will continue and lead to additional driver wage inflation." The pool of drivers has been constrained recently over COVID-19 fears, the impact of the Drug & Alcohol Clearinghouse and limited driver school enrollment during the pandemic, which has further tightened truck capacity in the market.The company also used a 15-cent third-quarter earnings beat to increase its full-year 2020 EPS guidance to a range of $2.68 to $2.72 compared to the prior range of $2.15 to $2.30 and the current 2020 consensus forecast of $2.39. Knight-Swift expects "strong project business" during the fourth quarter of 2020.Third-quarter results highlight strong TL marketThe company posted third-quarter adjusted EPS of 79 cents, ahead of the consensus estimate of 64 cents and the 2019 third-quarter result of 48 cents. Gains on the sale of tractors and trailers presented an operating income headwind in the quarter, down approximately $7 million year-over-year. This was partially offset by a $4.2 million increase in gains from the company's portfolio of investments.The adjusted EPS result excluded 11 cents per share in amortization of intangible assets and legal accruals from before the Knight and Swift merger. Knight-Swift's key performance indicators – consolidatedRevenue in the TL segment increased 3% year-over-year excluding fuel, to $903 million on a 5% increase in revenue per tractor. Loaded miles were flat in the quarter but revenue per loaded mile excluding fuel increased 5%. Strong demand and tight truck capacity drove the division's adjusted operating ratio (OR), operating expenses expressed as a percentage of revenue, to 81.3%, 620 basis points better year-over-year.Management noted a "focus on cost control" as a reason for the improvement. The combination of salaries, wages and benefits expense, and purchased transportation expense as a percentage of revenue declined 80 basis points year-over-year, with operations and maintenance expense (-130 basis points) and rental expense (-80 basis points) declining as well. Swift's adjusted OR was 77.9% with Knight operating at an 80.1% OR. Improvement in the company's dedicated and refrigerated segments was also referenced.View more earnings on KNX Knight-Swift's key performance indicators – TLThe logistics segment, mostly brokerage, saw 180 basis points of margin erosion at a 97.4% adjusted OR. Tight truck capacity forced spot rates higher, resulting in a 300-basis-point decline in brokerage gross margin to 11%. The release noted "margins began to stabilize and subsequently improved throughout the third quarter of 2020."Knight-Swift's intermodal unit squeaked out an operating profit in during the quarter, a far better result than the $4.4 million adjusted operating loss posted last quarter. Revenue fell 9% year-over-year on fewer loads and lower revenue per load. Excluding fuel, intermodal revenue per load was up 3%. The 6% year-over-year decline in loads was worse than the 2% increase in intermodal container movements reported on the U.S. railroads. "We continue to develop our Intermodal network and cost structure and expect to continue to see improved results in the fourth quarter," the press release stated. Knight-Swift's key performance indicators – logistics and intermodalKnight-Swift closed the third quarter with $855 million of available liquidity, including $240 million in unrestricted cash, and net debt of $642 million, down $118 million from the 2019 close. Free cash flow for the first nine months of 2020 was $379 million, which includes a $93 million cash settlement related to the classification of independent contractors.The company has lowered capital expenditures (capex) further. Net capex is expected to be in a range of $380 million to $405 million in 2020, down from $500 million to $525 million. The carrier plans to finance approximately $120 million of this year's equipment purchases "in order to keep our leverage from falling below our target range and to take advantage of historically low medium-term fixed interest rates."The average age of the tractor fleet at the end of the third quarter was 2.1 years, up slightly from 2 years in the third quarter of 2019.Net capex in 2021 is expected to range from $430 million to $480 million.Shares of KNX are up more than 1% on the day compared to the S&P 500, which is off slightly.Click for more FreightWaves articles by Todd Maiden. * P.A.M. Transportation's Q3 well ahead of forecasts * Oversight commission still waiting on Pentagon's explanation of YRC loan * J.B. Hunt stock sags on 3Q miss, management doubles down on long approachSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Knight-Swift Raises Outlook For 2020, 2021 Well Ahead Of Forecasts * Analysts Continue To Raise The Bar For Trucking Companies(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
In a rare move, Knight-Swift Transportation Holdings Inc. (NYSE: KNX) issued full-year 2021 guidance a full quarter ahead of schedule. The Phoenix-based truckload (TL) and transportation provider said it expects 2021 adjusted earnings per share (EPS) to be in the range of $3.20 to $3.40, well ahead of the current consensus estimate of $2.90 according to Seeking Alpha.On Wednesday, the company posted third-quarter adjusted EPS of 79 cents, ahead of the consensus estimate of 64 cents and the 2019 third quarter of 48 cents. The adjusted result excludes 11 cents per share in amortization of intangible assets and legal accruals from before the Knight and Swift merger.The carrier also increased its full-year 2020 EPS guidance to a range of $2.68 to $2.72 compared to the prior range of $2.15 to $2.30. The current 2020 consensus forecast calls for EPS of $2.39.From the Wednesday press release, "Both the strength in freight demand and constrained capacity led to earlier peak volumes, which we expect will continue into the fourth quarter."View more earnings on KNXSurging demand and tight truck capacity resulted in a 54% increase in adjusted operating income in the company's trucking segment. The tight supply constraints led to 180 basis points of margin erosion in the company's logistics segment (brokerage), which was partially offset by intermodal which swung back to profitability during the quarter.The company doesn't hold a conference call. Stay tuned to FreightWaves for more coverage on Knight-Swift's earnings report. Knight-Swift's key performance indicatorsClick for more FreightWaves articles by Todd Maiden. * Oversight commission still waiting on Pentagon's explanation of YRC loan * Freight volumes and expenditures advance further during September * J.B. Hunt stock sags on 3Q miss, management doubles down on long approachSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Analysts Continue To Raise The Bar For Trucking Companies(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Knight-Swift (KNX) delivered earnings and revenue surprises of 25.40% and 4.26%, respectively, for the quarter ended September 2020. Do the numbers hold clues to what lies ahead for the stock?