Knight, Covenant, Roadrunner Report Weaker Earnings
Knight Transportation Inc., Covenant Transportation Group Inc. and Roadrunner Transportation Systems reported weaker third-quarter results due to the freight market.
Net income dropped 11% at Phoenix-based Knight to $24.7 million, or 31 cents per share. Covenant fell 67% to $3.6 million, or 20 cents, and Roadrunner plummeted 89% to $1.8 million, or 5 cents.
Revenue at Knight fell 8.5% to $276.3 million. In the year-earlier period, net income was $27.6 million, or 39 cents, including a charge for a lawsuit-related expense. Profit before interest and taxes fell 11% at the trucking unit and 23% at the logistics business, which includes intermodal.
“The freight environment in the second quarter of 2016 was less attractive than the same quarter a year ago,” CEO Dave Jackson said. He added that excess capacity in the industry should be reduced by events including fewer truck orders, rising bankruptcies, an aging driver corps and regulatory factors.
Covenant warned before the quarter ended that its results would fall short of its earlier projection. Revenue at Covenant fell 9% to $158.8 million. In the prior-year period, Covenant earned $11 million, or 60 cents per share.
The second-quarter 2015 earnings were inflated by 12 cents per share for an insurance-related adjustment.
CEO David Parker said, “Capacity was plentiful industrywide, and a segment of the shipping community became more rate conscious, which pressured our average freight revenue per mile as well as our volumes.”
Covenant also was hurt by continuing losses at its refrigerated unit, Southern Refrigerated Transport, as well as depreciation and fuel-cost hedging. Utilization also declined with fewer miles operated, and the unseated truck count rose to 6.2%.
Revenue at Roadrunner decreased just 6.7% to $483.4 million. At Roadrunner, earnings were $16.5 million, or 42 cents, in the year-earlier period.
Results worsened at the less-than-truckload, truckload and logistics units.
LTL operating income dipped to $1.4 million as revenue fell to $112.3 million. Truckload revenue was down the least at less than 2%, but operating income fell to $6.2 million from $19.7 million. Logistics revenue slumped 16% to $4.8 million from $6.7 million.
Roadrunner, based in Cudahy, Wisconsin, ranks No. 16 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. Knight is No. 29 and Covenant is No. 43.
In addition, No. 64 P.A.M. Transportation Services Inc. net income declined 36% to $4 million, or 61 cents per share, hurt by a $7.1 million rise related to purchased transportation. Gains on used-truck sales also declined by $480,000. Revenue rose 3% to $111.5 million at the Tonitown, Arkansas-based company. Prior-year period earnings were $6.9 million, or 94 cents.
Jacksonville, Florida-based Patriot Transportation Holding’s fiscal third-quarter earnings for the period ending June 30 rose 43% to $1.4 million. Revenue increased 3% to $31.4 million.
“We have been successful the past several quarters in growing per-mile transportation revenue while adding revenue miles through new business opportunities,” a Patriot statement said.
