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Knight-Swift (KNX) Up 2.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Knight-Swift Transportation Holdings (KNX - Free Report) . Shares have added about 2.8% 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 drivers.
Earnings Miss in Q2
Knight-Swift's second-quarter 2024 adjusted earnings of 24 cents per share missed the Zacks Consensus Estimate of 27 cents and declined 51% year over year. KNX’s bottom line was weighed down by a $12.5 million pre-tax charge for the settlement of an auto liability claim from 2020. This settlement unfavorably affected KNX’s adjusted EPS by 6 cents per share.
Total revenues of $1.846 million missed the Zacks Consensus Estimate of $1.882 million but improved 18.9% year over year. The top line improved year over year owing to the acquisition of U.S. Xpress Enterprises, Inc. effective Jul 1, 2023. Revenues, excluding truckload and LTL fuel surcharge, grew 18.1% year over year to $ 1.641 billion.
Total operating expenses (on a reported basis) increased 22.2% year over year to $1.78 billion.
Knight-Swift’s adjusted operating income fell 22.8% year over year.
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1.102 billion, up 33% year over year. Adjusted segmental operating income plunged 54.3% to $31.15 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 540 basis points (bps) to 97.2%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $263.09 million in the second quarter, up 15.1% year over year. Adjusted segmental operating income grew 8.2% to $36.96 million. Adjusted operating ratio rose 80 bps to 85.9%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $131.70 million, up 11.8% year over year. Adjusted operating income decreased 40.2% to $5.92 million. The adjusted operating ratio rose 390 bps to 95.5%.
Intermodal revenues (excluding inter-segment transactions) totaled $97.52 million, down 6.5% year over year. The operating ratio (on a reported basis) fell 460 bps to 101.8%.
Liquidity
Knight-Swift exited the second quarter with cash and cash equivalents of $186.47 million compared with $204.76 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.17 billion compared with $1.19 billion at the end of prior quarter.
Guidance
Knight-Swift expects third-quarter 2024 adjusted earnings per share (EPS) in the range of 31-35 cents and fourth-quarter 2024 EPS in the range of 32-36 cents. KNX expects net cash capital expenditures for 2024 in the $600-$650 million band. The tax rate is expected to be around 29-30% for 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Knight-Swift has an average Growth Score of C, though it is lagging a lot 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 top 40% 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.
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Knight-Swift (KNX) Up 2.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Knight-Swift Transportation Holdings (KNX - Free Report) . Shares have added about 2.8% 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 drivers.
Earnings Miss in Q2
Knight-Swift's second-quarter 2024 adjusted earnings of 24 cents per share missed the Zacks Consensus Estimate of 27 cents and declined 51% year over year. KNX’s bottom line was weighed down by a $12.5 million pre-tax charge for the settlement of an auto liability claim from 2020. This settlement unfavorably affected KNX’s adjusted EPS by 6 cents per share.
Total revenues of $1.846 million missed the Zacks Consensus Estimate of $1.882 million but improved 18.9% year over year. The top line improved year over year owing to the acquisition of U.S. Xpress Enterprises, Inc. effective Jul 1, 2023. Revenues, excluding truckload and LTL fuel surcharge, grew 18.1% year over year to $ 1.641 billion.
Total operating expenses (on a reported basis) increased 22.2% year over year to $1.78 billion.
Knight-Swift’s adjusted operating income fell 22.8% year over year.
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1.102 billion, up 33% year over year. Adjusted segmental operating income plunged 54.3% to $31.15 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 540 basis points (bps) to 97.2%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $263.09 million in the second quarter, up 15.1% year over year. Adjusted segmental operating income grew 8.2% to $36.96 million. Adjusted operating ratio rose 80 bps to 85.9%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $131.70 million, up 11.8% year over year. Adjusted operating income decreased 40.2% to $5.92 million. The adjusted operating ratio rose 390 bps to 95.5%.
Intermodal revenues (excluding inter-segment transactions) totaled $97.52 million, down 6.5% year over year. The operating ratio (on a reported basis) fell 460 bps to 101.8%.
Liquidity
Knight-Swift exited the second quarter with cash and cash equivalents of $186.47 million compared with $204.76 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.17 billion compared with $1.19 billion at the end of prior quarter.
Guidance
Knight-Swift expects third-quarter 2024 adjusted earnings per share (EPS) in the range of 31-35 cents and fourth-quarter 2024 EPS in the range of 32-36 cents. KNX expects net cash capital expenditures for 2024 in the $600-$650 million band. The tax rate is expected to be around 29-30% for 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Knight-Swift has an average Growth Score of C, though it is lagging a lot 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 top 40% 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.