Knight-Swift Closes 2024 Preparing for Upturn
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Knight-Swift Transportation Holdings reported a revenue decline of 3.5% in the fourth quarter amid efforts to improve the business ahead of the expected up cycle, the company said Jan. 22.
The Phoenix-based truckload motor carrier posted net income attributable to itself of $69.5 million, or 43 cents a diluted share, for the three months ending Dec. 31. That compared with a loss of $10.7 million, or negative 7 cents, during the same time in 2023. Total revenue declined to $1.86 billion from $1.93 billion.
“As we close the book on 2024, we have more conviction that we are finally moving on from the prolonged down cycle that has weighed on the freight transportation sector for nearly three years,” Knight-Swift CEO Adam Miller said on a conference call with investors. “2024 was another very difficult year, but it also brought a stabilization in pricing, a return of seasonal patterns, a cooling of cost inflation and a marketplace that gave more and more indications of approaching balance in the second half of the year.”
Miller added that the freight rates and inflation over the past three years have taken margins to unusual lows. But he also noted that company leadership has been using the down cycle to reinvest in the business and prepare for the eventual turnaround. That includes pursuing acquisitions to support growth and margin improvement in truckload and less-than-truckload.
“We have diligently trimmed costs in our businesses to mitigate margin pressure in the trough,” Miller said. “We have sustained efforts to develop technologies that will help our business be more efficient and responsive to both opportunities and challenges created by a new cycle.
“We have taken advantage of unique opportunities to accelerate the organic expansion of our LTL network on our path to developing a valuable nationwide service offering.”
The results came close to Wall Street’s expectations. Analysts had been looking for 33 cents per share and quarterly revenue of $1.89 billion, according to Zacks Consensus Estimate.
For the full year, Knight-Swift reported net income of $117.6 million, or 73 cents a share, on revenue of $7.41 billion, compared with net income of $217.1 million, or $1.34 a share, on revenue of $7.14 billion in 2023.
“We believe these efforts, our leading truckload scale and our diverse service offerings, will position us to be an outside beneficiary in an improving market,” Miller said, “particularly because our industry leading one-way truckload exposure can be arguably the most commoditized service during loose markets, but becomes some of the most valuable capacity we offer in a tighter market.”
Revenue by Segment
- Truckload decreased 4.4% to $1.1 billion from $1.16 billion during the same time in 2023. This was driven by a 3.7% decrease in loaded miles that primarily was concentrated in dedicated services. Revenue per loaded mile declined 0.7% year over year but increased 1.1% over the third quarter. Miles per tractor also improved amid efforts by the company to drive productivity and dispose of underutilized assets. Operating income for the segment increased 16% to $76.4 million from $65.8 million.
- LTL increased 20.2% to $278.9 million from $232.1 million. The revenue rise came amid a 13.3% increase in shipments per day. That included the recent acquisition of DHE Transportation. The company has since opened 37 additional service centers and 14 more facilities because of the acquisition. Revenue per shipment increasing by 6.6% offset a decrease in weight per shipment. Operating income fell 68.1% to $9.5 million from $29.8 million.
- Logistics increased 2.1% to $168 million from $164.5 million. The report noted logistics load count was down 9.9% year over year. Revenue per load increased 12.3% year over year, but this was offset by increased purchased transportation costs. Operating income decreased 11.9% to $9.4 million from $10.7 million.
- Intermodal increased 4.9% to $99 million from $94.4 million. The gain was driven by a 10.2% increase in load count, but this partially was offset by a 4.8% decline in revenue per load year over year. The segment also experienced an operating loss of $1.45 million, improving from a loss of $4.45 million.
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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