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Knight-Swift (KNX) Up 8.2% 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 8.2% in that time frame, outperforming 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 Beat in Q3
Knight-Swift's third-quarter 2024 adjusted earnings of 34 cents per share beat the Zacks Consensus Estimate by a penny but declined 17.1% year over year. KNX’s bottom line was weighed down by a $6.6 million increase in net interest expense and a 6.1 percentage point increase in the effective tax rate.
Total revenues of $1.87 million missed the Zacks Consensus Estimate of $1.94 million and declined 7.1% year over year. Revenues, excluding truckload and LTL fuel surcharge, fell 5.3% year over year to $1.68 billion.
Total operating expenses (on a reported basis) decreased 7.4% year over year to $1.79 billion.
Knight-Swift’s adjusted operating income fell 7.1% year over year.
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1.10 billion, down 6.1% year over year. Adjusted segmental operating income plunged 19.4% to $48.05 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 70 basis points (bps) to 95.6%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $280.18 million in the third quarter, up 16.7% year over year. Adjusted segmental operating income down 19.5% to $29.11 million. Adjusted operating ratio rose 470 bps to 89.6%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $143.58 million, down 9.5% year over year. Adjusted operating income decreased 26.6% to $7.84 million. The adjusted operating ratio rose 120 bps to 94.5%.
Intermodal revenues (excluding inter-segment transactions) totaled $102.67 million, up 1.4% year over year owing to a 7.2% increase in load count, partially offset by a 5.3% decline in revenue per load. The operating ratio (on a reported basis) fell 310 bps to 101.4%.
Liquidity
Knight-Swift exited the third quarter with cash and cash equivalents of $166.34 million compared with $186.47 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.50 billion compared with $1.17 billion at the end of prior quarter.
Guidance
Knight-Swift expects fourth-quarter 2024 EPS in the range of 32-36 cents. Adjusted EPS for the first quarter of 2025 is expected in the range of 29-33 cents. KNX now expects net cash capital expenditures for 2024 in the $525 million - $575 million band (prior view: $600-$650 million band).
The tax rate (on an adjusted basis) is expected to be around 26-27% for fourth-quarter 2024 and 26-28% for 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Knight-Swift has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 8.2% 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 8.2% in that time frame, outperforming 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 Beat in Q3
Knight-Swift's third-quarter 2024 adjusted earnings of 34 cents per share beat the Zacks Consensus Estimate by a penny but declined 17.1% year over year. KNX’s bottom line was weighed down by a $6.6 million increase in net interest expense and a 6.1 percentage point increase in the effective tax rate.
Total revenues of $1.87 million missed the Zacks Consensus Estimate of $1.94 million and declined 7.1% year over year. Revenues, excluding truckload and LTL fuel surcharge, fell 5.3% year over year to $1.68 billion.
Total operating expenses (on a reported basis) decreased 7.4% year over year to $1.79 billion.
Knight-Swift’s adjusted operating income fell 7.1% year over year.
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1.10 billion, down 6.1% year over year. Adjusted segmental operating income plunged 19.4% to $48.05 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 70 basis points (bps) to 95.6%.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $280.18 million in the third quarter, up 16.7% year over year. Adjusted segmental operating income down 19.5% to $29.11 million. Adjusted operating ratio rose 470 bps to 89.6%.
Revenues from Logistics (excluding inter-segment transactions) amounted to $143.58 million, down 9.5% year over year. Adjusted operating income decreased 26.6% to $7.84 million. The adjusted operating ratio rose 120 bps to 94.5%.
Intermodal revenues (excluding inter-segment transactions) totaled $102.67 million, up 1.4% year over year owing to a 7.2% increase in load count, partially offset by a 5.3% decline in revenue per load. The operating ratio (on a reported basis) fell 310 bps to 101.4%.
Liquidity
Knight-Swift exited the third quarter with cash and cash equivalents of $166.34 million compared with $186.47 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.50 billion compared with $1.17 billion at the end of prior quarter.
Guidance
Knight-Swift expects fourth-quarter 2024 EPS in the range of 32-36 cents. Adjusted EPS for the first quarter of 2025 is expected in the range of 29-33 cents. KNX now expects net cash capital expenditures for 2024 in the $525 million - $575 million band (prior view: $600-$650 million band).
The tax rate (on an adjusted basis) is expected to be around 26-27% for fourth-quarter 2024 and 26-28% for 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Knight-Swift has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.