First look: Knight-Swift’s Q3 beats expectations

Knight-Swift Transportation beat third-quarter expectations Wednesday after the market closed. Knight-Swift (NYSE: KNX) reported adjusted earnings per share of 83 cents, 51 cents higher than the year-ago quarter and 7 cents better than the consensus estimate. (Management’s EPS guidance range was 71 to 77 cents.) Revenue of $2.

2 billion was up 14% y/y (up 8% y/y excluding fuel surcharges) and slightly ahead of analysts’ expectations for $2. 17 billion.

“Similar to our outlook last quarter, we expect momentum across our businesses to keep building as rates continue to be reset, as we maintain our cost and operational initiatives, and as we anticipate more seasonal spot and project opportunities than we have seen in recent years,” said Knight-Swift CEO Adam Miller in a news release.

The truckload unit saw a 6. 5% y/y revenue increase (ex-fuel) as an 11% increase in revenue per tractor was only partially offset by a 4% decline in average tractors in service. Loaded miles per tractor were up 1% y/y, an eighth consecutive increase. Deadhead was down 170 basis points y/y to 12. 1%. Revenue per loaded mile (ex-fuel) increased 10% y/y.

The metric was up by a mid-teen percentage in its over-the-road service. The TL unit posted an 89. 2% adjusted operating ratio, 700 bps better y/y and in line with the midpoint of management’s guidance range. U. S. Xpress, which was acquired in 2023, operated at a low-90% adjusted OR in the quarter while Knight-Swift’s legacy brands operated at 88%.

Table: Knight-Swift’s key performance indicators Less-than-truckload revenue was up less than 1% y/y (ex-fuel). Tonnage increased 3% while revenue per hundredweight (ex-fuel) dipped 1%. Increases in weight per shipment (+5%) and length of haul (+6%) had mostly offsetting impacts on yield in the quarter. Revenue per shipment (ex-fuel) increased 4%.

Contractual renewals were up by a mid-single-digit percentage. The LTL unit booked a 91. 4% adjusted OR, 80 bps worse y/y. Knight-Swift issued fourth-quarter adjusted EPS guidance of 78 to 84 cents, which bracketed the 82-cent consensus estimate at the time of the print.

The third-quarter adjusted EPS number benefitted y/y from a $22-million reduction in net interest expense (10 cents per share), a lower tax rate (5 cents per share) and a slight increase in gains on equipment sales (1 cent per share). However, the other income line was down $3. 5 million y/y (2 cents per share). Shares of KNX were up 4.

4% in after-hours trading on Wednesday. The company will host a call at 5:30 p. m. EDT on Wednesday to discuss third-quarter results. Why it matters? Knight-Swift is the nation’s largest asset-based TL carrier and serves as a bellwether for market trends.

The company’s third-quarter results highlight that the market has transitioned from a cyclical downturn to a structural recovery. More FreightWaves articles by Todd Maiden: Heartland Express sees earnings turnaround in Q3 Werner Enterprises issues Q3 profit warning J. B.

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