Knight-Swift Reports Nearly $1.9B in Revenue for Q3
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Knight-Swift Transportation Holdings experienced a 49.4% decline in earnings year over year during the third quarter of 2024, the company reported Oct. 23.
The Phoenix-based truckload motor carrier posted net income of $30.5 million, or 19 cents a diluted share, for the three months ending Sept. 30. That compared with $60.2 million, or 37 cents, during the same time the previous year. Total revenue decreased 7.1% to $1.88 billion from $2.02 billion.
The results missed expectations from Wall Street investment analysts, who had forecast EPS of 33 cents and quarterly revenue of $1.95 billion, according to Zacks Consensus Estimate.
“Although we remain cautious in an environment that remains challenging, where further attrition of excess capacity is still needed, we continue to observe positive signs,” Knight-Swift CEO Adam Miller said on a conference call with investors. “We are seeing opportunities to address acute needs for our customers that may not be reflective of the broader market. This is where our scale and unique suite of diversified brands offer distinct value to our customers.”
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Miller highlighted several positive industry signs, including seasonal patterns that are carrying over from previous quarters and more favorable truckload contract bids. Also, Miller said truckload revenue per mile is improving sequentially, and customers are reducing their usage of brokers in an effort to improve cargo security.
Miller also said Knight-Swift is well into its integration of U.S. Xpress, which it acquired in March 2023.
“On a year-over-year basis, our truckload revenue excluding fuel surcharge for the third quarter decreased 6.1%, reflecting a similar decrease in loaded miles as we lapped the acquisition of U.S. Xpress at the beginning of the quarter,” Miller said. “Revenue per loaded mile excluding fuel surcharge was essentially flat year over year.”
The revenue decline in truckload Miller referenced amounted to a drop to $1.11 billion from $1.18 billion a year ago, while segment operating income declined 6.2% to $45.4 million from $48.4 million. The company attributed the revenue decline to a 5.7% decrease in loaded miles, while the U.S. Xpress acquisition negatively impacted the adjusted operating ratio for the segment. Knight-Swift said it’s working diligently to improve its cost structure and equipment utilization to mitigate pressure on margins through the prolonged weak freight cycle.
“Miles per tractor were also flat year over year as improvements in the legacy trucking business were offset by a decline at U.S. Xpress, reflecting a turn in the freight portfolio as we redefined the freight network over the past year for U.S. Xpress,” Miller said. “Similarly, revenue, excluding fuel surcharge, per tractor declined slightly by six-tenths of a percent year over year, as improvements in the legacy business were offset by a decline at U.S. Xpress.”
Less-than-truckload segment revenue rose 16.7% to $280.2 million from $240 million during the year-ago period, but operating income fell 23.9% to $24.6 million from $32.3 million. The revenue growth came as shipments per day increased 11.1% year over year, while Knight’s Swift’s July acquisition of California-based LTL carrier Dependable Highway Express contributed about 7.5% to the improvements. Revenue per hundredweight increased 9.2%, while revenue per shipment increased by 4.8%.
“Market conditions in the LTL industry remain much more supportive than in truckload, though the pace of year-over-year rate increases appears to be slowing a bit as comparisons get increasingly more difficult, while industrial production is stuck in neutral,” Miller said. “We are still experiencing solid demand and steady rate increases in our business, partly aided by our expanding network that allows us to offer our services on more lanes to new and existing customers.”
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Logistics segment revenue declined 9.5% to $143.6 million from $158.6 million, while operating income fell 35.5% to $6.68 million from $10.4 million. Load count for the segment was down 21.1% year over year but rose 5.5% compared with the second quarter. Revenue per load increased 13.6% year over year. Knight-Swift said that in this segment, it remains disciplined on price and diligent in carrier qualification.
Intermodal segment revenue inched up 1.4% to $102.7 million from $101.2 million but posted an operating loss of $1.39 million. Still, that result was a 69.3% improvement from an operating loss of $4.52 million during the prior-year period. Knight-Swift also noted that the revenue gain was the first year-over-year revenue increase in six quarters for the segment, fueled by a 7.2% increase in load count that was partially offset by a 5.3% decline in revenue per load.
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