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Knight-Swift Transportation Holdings (KNX - Free Report) reported disappointing second-quarter 2023 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings (excluding 10 cents from non-recurring items) of 49 cents per share missed the Zacks Consensus Estimate of 55 cents and tumbled 65.3% year over year.
Total revenues of $1,553 million also underperformed the Zacks Consensus Estimate of $1,591 million. The top line plunged 20.8% year over year.
Total operating expenses (on a reported basis) decreased 10.8% year over year to $1.46 billion. We had expected the metric to decline 11.6% in the reported quarter from second-quarter 2022 actuals.
Knight-Swift’s adjusted operating income fell 66.3% year over year.
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $829.4 million, down 15.5% year over year. The actual percentage decline was steeper than our expectation of an 8.1% year-over-year fall.
Results were hurt by a 14.5% decrease in average revenue per tractor as well as a 3.3% decline in miles per tractor. Adjusted segmental operating income plunged 67% to $68.2 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 1290 basis points (bps) to 91.8%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $228.6 million in the June quarter, up 2% year over year. Adjusted segmental operating income dipped 28.5% to $34.2 million. Adjusted operating ratio surged 640 bps to 85.1%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $117.8 million, down 52.4% year over year, owing to a 26.8% decrease in revenue per load. We had expected segmental revenues to plunge 45.5% year over year. Adjusted operating income decreased 77.5% to $9.9 million. The adjusted operating ratio rose 940 bps to 91.6%.
Intermodal revenues (excluding inter-segment transactions) totaled $104.3 million, down 21.5% year over year. We had expected segmental revenues to sink 30.8% year over year. The operating ratio (on a reported basis) soared to 106.4% from 89.3% in the year-ago quarter.
Liquidity
Knight-Swift exited the second quarter with cash and cash equivalents of $229 million compared with $196.7 million at the end of December 2022. Additionally, long-term debt (excluding current maturities) of $1.26 billion raised from $1.02 billion at December 2022 end.
Updated 2023 Guidance
For the ongoing year, Knight-Swift expects adjusted earnings per share in the range of $2.10-$2.30 (earlier view: $3.35-$3.55). The Zacks Consensus Estimate is currently pegged at $2.80. The updated adjusted earnings per share guidance includes a U.S. Xpress loss of 25-30 cents. The acquisition was completed on Jul 1.
KNX now expects net cash capital expenditures for 2023 in the $700-$750 million band (prior guidance: $640-$690 million), which now includes U.S. Xpress. The tax rate is now expected to be between 25% and 26% (prior view: 25%) for 2023.
Q2 Performance of Some Other Transportation Companies
J.B. Hunt Transport Services’ (JBHT - Free Report) second-quarter 2023 earnings of $1.81 per share missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year. Total operating revenues of $3,132.6 million also missed the Zacks Consensus Estimate of $3,347.5 million. The top line fell 18.4% year over year.
The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal and 21% in Truckload. A 4% decrease in productivity in Dedicated Capacity Solutions added to the woes. Changes in customer rate, freight mix and lower fuel surcharge revenues resulted in this downtick.
Delta Air Lines’ (DAL - Free Report) second-quarter 2023 earnings (excluding 16 cents from non-recurring items) of $2.68 per share comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported earnings of $1.44 a year ago.
Revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis driven by higher air-travel demand. The adjusted operating margin was 17.1% compared with 11.7% in the prior-year period.
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Knight-Swift (KNX) Lags Q2 Earnings, Posts Dull '23 EPS View
Knight-Swift Transportation Holdings (KNX - Free Report) reported disappointing second-quarter 2023 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings (excluding 10 cents from non-recurring items) of 49 cents per share missed the Zacks Consensus Estimate of 55 cents and tumbled 65.3% year over year.
Total revenues of $1,553 million also underperformed the Zacks Consensus Estimate of $1,591 million. The top line plunged 20.8% year over year.
Total operating expenses (on a reported basis) decreased 10.8% year over year to $1.46 billion. We had expected the metric to decline 11.6% in the reported quarter from second-quarter 2022 actuals.
Knight-Swift’s adjusted operating income fell 66.3% year over year.
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Knight-Swift Transportation Holdings Inc. price-consensus-eps-surprise-chart | Knight-Swift Transportation Holdings Inc. Quote
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $829.4 million, down 15.5% year over year. The actual percentage decline was steeper than our expectation of an 8.1% year-over-year fall.
Results were hurt by a 14.5% decrease in average revenue per tractor as well as a 3.3% decline in miles per tractor. Adjusted segmental operating income plunged 67% to $68.2 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 1290 basis points (bps) to 91.8%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $228.6 million in the June quarter, up 2% year over year. Adjusted segmental operating income dipped 28.5% to $34.2 million. Adjusted operating ratio surged 640 bps to 85.1%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $117.8 million, down 52.4% year over year, owing to a 26.8% decrease in revenue per load. We had expected segmental revenues to plunge 45.5% year over year. Adjusted operating income decreased 77.5% to $9.9 million. The adjusted operating ratio rose 940 bps to 91.6%.
Intermodal revenues (excluding inter-segment transactions) totaled $104.3 million, down 21.5% year over year. We had expected segmental revenues to sink 30.8% year over year. The operating ratio (on a reported basis) soared to 106.4% from 89.3% in the year-ago quarter.
Liquidity
Knight-Swift exited the second quarter with cash and cash equivalents of $229 million compared with $196.7 million at the end of December 2022. Additionally, long-term debt (excluding current maturities) of $1.26 billion raised from $1.02 billion at December 2022 end.
Updated 2023 Guidance
For the ongoing year, Knight-Swift expects adjusted earnings per share in the range of $2.10-$2.30 (earlier view: $3.35-$3.55). The Zacks Consensus Estimate is currently pegged at $2.80. The updated adjusted earnings per share guidance includes a U.S. Xpress loss of 25-30 cents. The acquisition was completed on Jul 1.
KNX now expects net cash capital expenditures for 2023 in the $700-$750 million band (prior guidance: $640-$690 million), which now includes U.S. Xpress. The tax rate is now expected to be between 25% and 26% (prior view: 25%) for 2023.
Currently, Knight-Swift carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 Performance of Some Other Transportation Companies
J.B. Hunt Transport Services’ (JBHT - Free Report) second-quarter 2023 earnings of $1.81 per share missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year. Total operating revenues of $3,132.6 million also missed the Zacks Consensus Estimate of $3,347.5 million. The top line fell 18.4% year over year.
The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal and 21% in Truckload. A 4% decrease in productivity in Dedicated Capacity Solutions added to the woes. Changes in customer rate, freight mix and lower fuel surcharge revenues resulted in this downtick.
Delta Air Lines’ (DAL - Free Report) second-quarter 2023 earnings (excluding 16 cents from non-recurring items) of $2.68 per share comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported earnings of $1.44 a year ago.
Revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis driven by higher air-travel demand. The adjusted operating margin was 17.1% compared with 11.7% in the prior-year period.