Knight-Swift Modestly Beats Expectations And Trims Guidance - Knight-Swift (NYSE:KNX)

Knight-Swift Transportation Holdings, Inc. KNX reported first quarter 2019 adjusted earnings of $0.55 per share compared to analysts' expectations of $0.52 per share. Adjusted earnings per share (EPS) were $0.11 per share higher year-over-year.

The largest truckload (TL) transportation company in North America generated $1.2 billion in total revenue, down 5.2 percent year-over-year, lower than the $1.31 billion consensus estimate. Revenue, excluding fuel surcharges, declined 4.1 percent year-over-year. The revenue decline (excluding surcharges) was attributable to the 4.7 percent decline in revenue in the truckload segment (revenue increased 1.3 percent in the logistics division and intermodal revenue increased 5 percent).

From the company's press release, "Our revenue per loaded mile, excluding fuel surcharge and intersegment transactions, increased 9.4 percent compared to the first quarter of 2018. This was partially offset by an 8.7 percent decrease in miles per tractor and a 3.6 percent decrease in average tractor count, compared to the first quarter of 2018."

Adjusted operating income increased 21.8 percent year-over-year to $127 million as the company's adjusted operating ratio improved 250 basis points to 88.4 percent. Management noted an increase in revenue per loaded mile, improved safety results and improved cost control as the reasons. The truckload division reported an 86.7 percent adjusted operating ratio which was 220 bps better compared to first quarter 2018.

IMAGE: KNX KEY PERFORMANCE INDICATORS

KNX modestly lowered adjusted earnings guidance in the release. The company lowered the top-end of the second quarter range by $0.02 per share to $0.62 to $0.64 per share, which is in-line with Seeking Alpha's current consensus estimate of $0.63. KNX also forecast third quarter adjusted earnings per share of $0.62 to $0.66. This range is lower than the current $0.67 per share forecast. The company said these forecasts assume a stable tractor count, that contract rates will remain positive (with fewer spot opportunities), year-over-year operating ratio improvements in some of the Swift businesses and that the unfavorable year-over-year percent changes in miles per tractor will lessen.