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KNX Q3 Earnings Beat Estimates on Truckload Pricing Gains
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Key Takeaways
Knight-Swift's Q3 EPS surged 159.4% to 83 cents, while revenues rose 14.2% to $2.20B, beating estimates.
Truckload adjusted operating income soared 202.3%,led by stronger pricing & improved network efficiency.
KNX projects Q4 EPS of 78-84 cents, with truckload revenues expected to grow at a low-double-digit rate.
Knight-Swift Transportation Holdings Inc. (KNX - Free Report) reported impressive third-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Stronger truckload pricing and improved network efficiency supported earnings growth.
However, the better-than-expected results failed to impress the market, as the stock has declined 3.1% since its earnings release on Oct. 21.
Image Source: Zacks Investment Research
Adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 75 cents by 10.7% and surged 159.4% year over year. Total revenues of $2.20 billion surpassed the consensus estimate of $2.14 billion by 2.9% and increased 14.2% year over year. Truckload revenue per loaded mile, excluding fuel surcharge and intersegment transactions, increased 9.7%.
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Revenues, excluding truckload and less-than-truckload (LTL) fuel surcharge, increased 7.7% year over year to $1.85 billion. Operating income surged 255.1% to $178.71 million, while adjusted operating income advanced 87.4% to $198.55 million.
The consolidated operating ratio (operating expenses as a percentage of revenues) improved 550 basis points to 91.9%. The adjusted operating ratio improved 450 basis points to 89.3%, reflecting pricing and network efficiency gains. Adjusted net income increased 164.9% to $135.87 million.
Knight-Swift's Truckload Margins Expand
Truckload total revenues increased 14% year over year to $1.41 billion. Revenues, excluding fuel surcharge and intersegment transactions, rose 6.5% to $1.15 billion, despite a 3% decline in loaded miles.
Adjusted operating income surged 202.3% to $124.63 million. The adjusted operating ratio improved 700 basis points to 89.2%, benefiting from stronger pricing, improved loaded miles per tractor and a 170-basis-point reduction in empty miles.
Average revenue per tractor increased 10.9% to $56,419, while average tractor count declined 4% to 20,470. Revenues per total mile, excluding fuel surcharge, increased 12.2%, outpacing the 3.8% rise in adjusted cost per mile.
U.S. Xpress continued improving profitability, with its over-the-road division achieving a mid-90s adjusted operating ratio.
KNX's LTL Revenues Rise, Margins Face Pressure
LTL total revenues increased 10.1% year over year to $434.52 million. Revenues, excluding fuel surcharge, edged up 0.4% to $341.70 million, supported by a 4% increase in revenue per shipment, partially offset by a 1.4% decline in daily shipments.
Daily tonnage increased 3.3%, while weight per shipment and length of haul rose 4.8% and 6.2%, respectively, reflecting improvements in freight mix.
Adjusted operating income declined 8.4% to $29.37 million, primarily owing to lower gains on asset sales. The adjusted operating ratio deteriorated 80 basis points to 91.4%.
Knight-Swift's Logistics and Intermodal Performance
Logistics revenues declined 1% year over year to $138.97 million. Revenue per load jumped 46.7%, offset by a 32.6% decline in load count. Adjusted operating income grew 19.6% to $9.57 million, while the adjusted operating ratio improved 120 basis points to 93.1%.
Logistics gross margin expanded 110 basis points year over year and 350 basis points sequentially to 18.9%, benefiting from contractual pricing improvements and easing capacity costs.
Intermodal revenues climbed 30.6% to $122.88 million, supported by a 13.3% increase in load count and a 15.2% rise in revenue per load.
The segment generated adjusted operating income of $2.76 million compared with $0.16 million a year ago. Its adjusted operating ratio improved 200 basis points to 97.8%.
KNX's Other Businesses Deliver Strong Growth
All Other Segments' revenues increased 41.8% year over year to $126 million, driven by growth in warehousing and independent contractor support services.
Operating income rose 68.4% to $19.50 million. The improvement reflected revenue growth and a more favorable comparison with the prior-year loss contingency, partially offset by accounts receivable securitization costs.
Knight-Swift's Liquidity and Cash Flow Improve
Knight-Swift exited September with $1.7 billion in unrestricted cash and available liquidity. Net debt stood at $2.1 billion, while stockholders' equity totaled $7.1 billion.
Operating cash flow for the first nine months of 2026 increased to $799.88 million from $543.43 million a year ago. Free cash flow reached $373.2 million after net capital expenditures of $426.7 million.
KNX's Fourth-Quarter Outlook Signals Growth
For fourth-quarter 2026, KNX expects adjusted earnings of 78-84 cents per share. Truckload revenues, excluding fuel surcharge, are projected to increase by a low-double-digit percentage, with the adjusted operating ratio improving 650-750 basis points year over year.
LTL revenues, excluding fuel surcharge, are expected to grow by a high-single-digit to low-double-digit percentage. Intermodal revenues are projected to increase 25-30%, while Logistics revenues are expected to remain flat.
Management narrowed its full-year 2026 net cash capital expenditure forecast to $600-$625 million from $600-$650 million.
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.
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KNX Q3 Earnings Beat Estimates on Truckload Pricing Gains
Key Takeaways
Knight-Swift Transportation Holdings Inc. (KNX - Free Report) reported impressive third-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Stronger truckload pricing and improved network efficiency supported earnings growth.
However, the better-than-expected results failed to impress the market, as the stock has declined 3.1% since its earnings release on Oct. 21.
Image Source: Zacks Investment Research
Adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 75 cents by 10.7% and surged 159.4% year over year. Total revenues of $2.20 billion surpassed the consensus estimate of $2.14 billion by 2.9% and increased 14.2% year over year. Truckload revenue per loaded mile, excluding fuel surcharge and intersegment transactions, increased 9.7%.
Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise
Knight-Swift Transportation Holdings Inc. price-consensus-eps-surprise-chart | Knight-Swift Transportation Holdings Inc. Quote
KNX's Consolidated Profitability Improves
Revenues, excluding truckload and less-than-truckload (LTL) fuel surcharge, increased 7.7% year over year to $1.85 billion. Operating income surged 255.1% to $178.71 million, while adjusted operating income advanced 87.4% to $198.55 million.
The consolidated operating ratio (operating expenses as a percentage of revenues) improved 550 basis points to 91.9%. The adjusted operating ratio improved 450 basis points to 89.3%, reflecting pricing and network efficiency gains. Adjusted net income increased 164.9% to $135.87 million.
Knight-Swift's Truckload Margins Expand
Truckload total revenues increased 14% year over year to $1.41 billion. Revenues, excluding fuel surcharge and intersegment transactions, rose 6.5% to $1.15 billion, despite a 3% decline in loaded miles.
Adjusted operating income surged 202.3% to $124.63 million. The adjusted operating ratio improved 700 basis points to 89.2%, benefiting from stronger pricing, improved loaded miles per tractor and a 170-basis-point reduction in empty miles.
Average revenue per tractor increased 10.9% to $56,419, while average tractor count declined 4% to 20,470. Revenues per total mile, excluding fuel surcharge, increased 12.2%, outpacing the 3.8% rise in adjusted cost per mile.
U.S. Xpress continued improving profitability, with its over-the-road division achieving a mid-90s adjusted operating ratio.
KNX's LTL Revenues Rise, Margins Face Pressure
LTL total revenues increased 10.1% year over year to $434.52 million. Revenues, excluding fuel surcharge, edged up 0.4% to $341.70 million, supported by a 4% increase in revenue per shipment, partially offset by a 1.4% decline in daily shipments.
Daily tonnage increased 3.3%, while weight per shipment and length of haul rose 4.8% and 6.2%, respectively, reflecting improvements in freight mix.
Adjusted operating income declined 8.4% to $29.37 million, primarily owing to lower gains on asset sales. The adjusted operating ratio deteriorated 80 basis points to 91.4%.
Knight-Swift's Logistics and Intermodal Performance
Logistics revenues declined 1% year over year to $138.97 million. Revenue per load jumped 46.7%, offset by a 32.6% decline in load count. Adjusted operating income grew 19.6% to $9.57 million, while the adjusted operating ratio improved 120 basis points to 93.1%.
Logistics gross margin expanded 110 basis points year over year and 350 basis points sequentially to 18.9%, benefiting from contractual pricing improvements and easing capacity costs.
Intermodal revenues climbed 30.6% to $122.88 million, supported by a 13.3% increase in load count and a 15.2% rise in revenue per load.
The segment generated adjusted operating income of $2.76 million compared with $0.16 million a year ago. Its adjusted operating ratio improved 200 basis points to 97.8%.
KNX's Other Businesses Deliver Strong Growth
All Other Segments' revenues increased 41.8% year over year to $126 million, driven by growth in warehousing and independent contractor support services.
Operating income rose 68.4% to $19.50 million. The improvement reflected revenue growth and a more favorable comparison with the prior-year loss contingency, partially offset by accounts receivable securitization costs.
Knight-Swift's Liquidity and Cash Flow Improve
Knight-Swift exited September with $1.7 billion in unrestricted cash and available liquidity. Net debt stood at $2.1 billion, while stockholders' equity totaled $7.1 billion.
Operating cash flow for the first nine months of 2026 increased to $799.88 million from $543.43 million a year ago. Free cash flow reached $373.2 million after net capital expenditures of $426.7 million.
KNX's Fourth-Quarter Outlook Signals Growth
For fourth-quarter 2026, KNX expects adjusted earnings of 78-84 cents per share. Truckload revenues, excluding fuel surcharge, are projected to increase by a low-double-digit percentage, with the adjusted operating ratio improving 650-750 basis points year over year.
LTL revenues, excluding fuel surcharge, are expected to grow by a high-single-digit to low-double-digit percentage. Intermodal revenues are projected to increase 25-30%, while Logistics revenues are expected to remain flat.
Management narrowed its full-year 2026 net cash capital expenditure forecast to $600-$625 million from $600-$650 million.
Currently, KNX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company had reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.