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Knight-Swift Transportation Holdings (KNX - Free Report) reported mixed third-quarter 2022 results wherein earnings lagged the Zacks Consensus Estimate but revenues beat the same.
Quarterly earnings (excluding 6 cents from non-recurring items) of $1.27 per share missed the Zacks Consensus Estimate of $1.33 and fell 2.3% year over year. The bottom line was unfavorably impacted by higher interest expenses, higher tax rates and lower gains on sales.
Total revenues of $1,896.8 million outperformed the Zacks Consensus Estimate of $1,864.7 million. The top line jumped 15.5% year over year.
Total operating expenses (on a reported basis) increased 18.9% year over year to $1.63 billion. Knight-Swift’s adjusted operating income fell 1.4% year over year.
KnightSwift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Revenues (excluding fuel surcharge and inter-segment transactions) in the Truckload segment totaled $967.76 million, up 3.7% year over year. Results were driven by a 1.8% increase in average revenue per tractor. Adjusted segmental operating income fell 14.9% to $176.13 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 400 basis points (bps) to 81.8%.
The Less-Than-Truckload (LTL) segment, which includes the results of AAA Cooper Transportation, a leading LTL carrier acquired by Knight-Swift in July 2021, generated revenues (excluding fuel surcharges) worth $224.44 million in the September quarter, up 33.7% year over year. Adjusted segmental operating income grew 66.4% to $34.89 million. Adjusted operating ratio (operating expenses as a percentage of revenues) fell 300 bps to 84.5%.
Revenues in the Logistics segment (excluding inter-segment transactions) amounted to $209.96 million, down 5.2% year over year, owing to a 21% decrease in revenue per load. Segmental adjusted operating income increased 1.2% to $27.79 million. Adjusted operating ratio fell 80 bps to 86.8%.
Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $130.78 million, up 16% year over year. The segmental operating ratio (on a reported basis) fell to 90.2% in the reported quarter from 91.5% in the year-ago quarter.
Liquidity, Dividends & Buyback
Knight-Swift exited the third quarter with cash and cash equivalents of $194.08 million compared with $198.02 million at the end of June 2022. Additionally, long-term debt (excluding current maturities) of $1.03 billion was flat sequentially.
So far this year, KNX returned $300 million to its shareholders in the form of share repurchases and $59 million as dividends.
2022 Guidance
For the ongoing year, Knight-Swift now expects adjusted earnings per share in the range of $5.17-$5.22 (previous guidance: $5.30-$5.45). The Zacks Consensus Estimate of $5.38 billion lies above the updated guidance.
KNX now expects net cash capital expenditures for 2022 in the band of $525 million–$575 million compared with the prior guidance of $550-$600 million. The tax rate is expected to be 25% for 2022.
Delta AirLines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An upbeat in air-travel demand aided results. In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an upbeat in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.
Total operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across — Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.
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Knight-Swift's (KNX) Q3 Earnings Miss, 2022 EPS View Cut
Knight-Swift Transportation Holdings (KNX - Free Report) reported mixed third-quarter 2022 results wherein earnings lagged the Zacks Consensus Estimate but revenues beat the same.
Quarterly earnings (excluding 6 cents from non-recurring items) of $1.27 per share missed the Zacks Consensus Estimate of $1.33 and fell 2.3% year over year. The bottom line was unfavorably impacted by higher interest expenses, higher tax rates and lower gains on sales.
Total revenues of $1,896.8 million outperformed the Zacks Consensus Estimate of $1,864.7 million. The top line jumped 15.5% year over year.
Total operating expenses (on a reported basis) increased 18.9% year over year to $1.63 billion. Knight-Swift’s adjusted operating income fell 1.4% year over year.
KnightSwift Transportation Holdings Inc. Price, Consensus and EPS Surprise
KnightSwift Transportation Holdings Inc. price-consensus-eps-surprise-chart | KnightSwift Transportation Holdings Inc. Quote
Segmental Results
Revenues (excluding fuel surcharge and inter-segment transactions) in the Truckload segment totaled $967.76 million, up 3.7% year over year. Results were driven by a 1.8% increase in average revenue per tractor. Adjusted segmental operating income fell 14.9% to $176.13 million. Adjusted operating ratio (operating expenses as a percentage of revenues) grew 400 basis points (bps) to 81.8%.
The Less-Than-Truckload (LTL) segment, which includes the results of AAA Cooper Transportation, a leading LTL carrier acquired by Knight-Swift in July 2021, generated revenues (excluding fuel surcharges) worth $224.44 million in the September quarter, up 33.7% year over year. Adjusted segmental operating income grew 66.4% to $34.89 million. Adjusted operating ratio (operating expenses as a percentage of revenues) fell 300 bps to 84.5%.
Revenues in the Logistics segment (excluding inter-segment transactions) amounted to $209.96 million, down 5.2% year over year, owing to a 21% decrease in revenue per load. Segmental adjusted operating income increased 1.2% to $27.79 million. Adjusted operating ratio fell 80 bps to 86.8%.
Revenues in the Intermodal segment (excluding inter-segment transactions) totaled $130.78 million, up 16% year over year. The segmental operating ratio (on a reported basis) fell to 90.2% in the reported quarter from 91.5% in the year-ago quarter.
Liquidity, Dividends & Buyback
Knight-Swift exited the third quarter with cash and cash equivalents of $194.08 million compared with $198.02 million at the end of June 2022. Additionally, long-term debt (excluding current maturities) of $1.03 billion was flat sequentially.
So far this year, KNX returned $300 million to its shareholders in the form of share repurchases and $59 million as dividends.
2022 Guidance
For the ongoing year, Knight-Swift now expects adjusted earnings per share in the range of $5.17-$5.22 (previous guidance: $5.30-$5.45). The Zacks Consensus Estimate of $5.38 billion lies above the updated guidance.
KNX now expects net cash capital expenditures for 2022 in the band of $525 million–$575 million compared with the prior guidance of $550-$600 million. The tax rate is expected to be 25% for 2022.
Currently, Knight-Swift carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
Delta AirLines’ (DAL - Free Report) third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by the high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ (UAL - Free Report) third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. An upbeat in air-travel demand aided results. In the year-ago quarter, UAL incurred a loss of $1.02 per share when air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an upbeat in air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.2% from third-quarter 2019 (pre-coronavirus) levels.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.
Total operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across — Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.