Knight-Swift Reports 15.5% Rise in Revenue to $1.9 Billion for Q3
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Knight-Swift Transportation Holdings Inc. saw mixed financials amid ongoing efforts to strengthen segment results during the third quarter, the company reported Oct. 19.
Total revenue for the Phoenix-based truckload carrier increased by 15.5% to $1.9 billion from $1.64 billion. Net income attributable to the company was $194.8 million, or $1.21 a diluted share, for the three months ending Sept. 30. That compared with $206.2 million, $1.23, during the same time the previous year.
“Our operating results remained strong across each of our reportable segments despite a changing freight environment that muted typical seasonal patterns toward the end of the third quarter,” Knight-Swift CEO David Jackson said. “These muted trends have continued into October as supply chains appear to be catching up and adjusting for uncertainty in consumer demand.”
The results were mixed on Wall Street; analysts had been looking for $1.33 per share and quarterly revenue of $1.86 billion, according to Zacks Consensus Estimate.
Jackson
“These conditions have begun to reduce supply, particularly with small carriers, who have experienced materially declining spot rates combined with significant inflationary operating costs,” Jackson said. “If these trends continue, we expect truckload supply to rapidly exit the market.”
The truckload segment reported Q3 revenue grew 3.7% to $967.8 million from $933.2 million during the same time the previous year. Operating income decreased 14.9% to $175.8 million from $206.5 million.
Revenue per loaded mile increased 8.1% year-over-year. Miles per tractor decreased by 4.2%, an improvement from the year-over-year decrease of 6.6% during the second quarter of 2022. Inflationary pressures in driver-related costs, maintenance and insurance offset the improvements in revenue per tractor.
The less-than-truckload segment reported revenue increased 33.7% to $224.4 million from $167.9 million last year. Operating income increased 76.7% to $30.9 million from $17.5 million.
Knight-Swift said it is ahead of the performance targets established as part of an effort to grow segment revenue and improve margins. Revenue per hundredweight increased 15.5%, and revenue per shipment increased by 9.3%.
Midwest Motor Express and AAA Cooper Transportation were acquired last year, and the targets to grow LTL revenue and improve margins were established as part of these acquisitions. Knight-Swift reported both companies achieved customer and cost synergies.
Jackson noted that the company is working to leverage synergy opportunities between the truckload and LTL segments.
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“The integrated systems will allow us to seamlessly connect the AAA Cooper and MME networks, building a super-regional network to support our customers,” Jackson said. “We anticipate further expansion into the LTL market through opportunities to grow organically and through acquisitions.’
The logistics segment reported revenue decreased 5.2% to $210 million from $221.4 million. Operating income increased 1.2% to $27.5 million from $27.1 million. Load count grew 20.1% year-over-year due to strong demand for logistics service offering in Q3. Logistics gross margin improved to 20.9% in the quarter despite a 21% decrease in revenue per load.
“An ongoing focus on revenue growth through innovation within the logistics segment has resulted in continued load count growth while operating with double-digit operating margins,” Jackson said. “Our power-only service offering continues to see strong demand and grew volume 33% year-over-year.
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“With an ever-changing freight market and economy, we feel confident in our ability to successfully navigate the current freight environment while providing valuable service to our diverse customer base, continuing to grow our business and returning value to our shareholders.”
The intermodal segment reported revenue increased 16% to $130.8 million from $112.8 million. Operating income increased 34.5% to $12.8 million from $9.54 million.
Revenue per load increased 27.5% year-over-year despite the load count being negatively impacted by threats of labor strikes during the last two weeks of the quarter. But now that labor challenges within the rail network appear to be softening the company is seeing improved transit times, more consistent notification times and more predictability for customers. But network fluidity continues to be a rail market challenge.
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
