It has been about a month since the last earnings report for Knight-Swift Transportation Holdings (KNX) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Knight-Swift due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Knight-Swift Transportation Holdings Inc. before ...

Core Insights - Knight-Swift Transportation (KNX) is experiencing significant pressure from rising expenses and tariff-related issues, making it less appealing for investors [1][8] Financial Performance - The Zacks Consensus Estimate for KNX's earnings for the December quarter has been revised downward by 20.8% over the past 60 days, and for 2026, the estimate has been cut by 11.3% [2] - KNX's share price has decreased by 21.1% year-to-date, compared to a 20.3% decline in the Transportation - Truck industry [3] Industry Ranking - KNX holds a Zacks Rank of 5 (Strong Sell), placing it in the bottom 6% of Zacks Industries, which indicates a bearish outlook [5] - The Transportation industry has a Zacks Industry Rank of 227 out of 243, reflecting overall weakness in the sector [5] Operational Challenges - The company is facing increased operating expenses, which rose by 4.5% year-over-year in Q3 2025 [6] - Labor costs, which account for 40% of total operating costs, increased by 4% year-over-year, while fuel expenses surged by 4% to $221.8 million [7] Market Environment - KNX is navigating a volatile macro environment characterized by economic uncertainty, shifting tariff regulations, and geopolitical tensions, which are impacting investment decisions and operational risks [9]

Core Insights - Knight-Swift Transportation Holdings Inc. (KNX) reported third-quarter 2025 adjusted earnings of 32 cents per share, missing the Zacks Consensus Estimate of 38 cents and declining 5.8% year over year, falling below the guided range of 36-42 cents [1][9] - Total revenues reached $1.92 billion, surpassing the Zacks Consensus Estimate of $1.89 billion and improving 2.7% year over year, with revenues excluding truckload and LTL fuel surcharge growing 2.4% to $1.72 billion [1] Financial Performance - Total operating expenses increased 4.5% year over year to $1.87 billion [2] - Truckload segment revenues totaled $1.08 billion, down 2.1% year over year due to a 2.3% decrease in loaded miles, with adjusted segmental operating income falling 15% to $41.22 million and an adjusted operating ratio rising 60 basis points to 96.2% [3] - The Less-Than-Truckload (LTL) segment generated revenues of $340.48 million, up 21.5% year over year, with adjusted segmental operating income increasing 10.1% to $32.05 million and an adjusted operating ratio rising 100 basis points to 90.6% [4] - Logistics revenues amounted to $140.4 million, down 2.2% year over year due to a 6.2% decline in load count, while adjusted operating income increased 1.9% to $8 million, and the adjusted operating ratio fell 20 basis points to 94.3% [5] - Intermodal revenues totaled $94.08 million, down 8.4% year over year due to an 11.5% decrease in load count, with revenues in All Other Segments increasing 29.9% and operating income growing 86.4% year over year [6] Liquidity and Guidance - Knight-Swift ended the third quarter with cash and cash equivalents of $192.67 million, down from $216.32 million in the prior quarter, while long-term debt decreased to $1.05 billion from $1.39 billion [7] - For the fourth quarter of 2025, KNX expects adjusted earnings per share in the range of 34-40 cents, with truckload segment revenues expected to remain stable and LTL segment revenues projected to grow between 10% and 15% year over year [8][10] - Net cash capital expenditures for 2025 are now expected to be between $475 million and $525 million, down from the previous guidance of $525 million to $575 million [11]

Financial Performance - Consolidated operating income increased 14.6% to $189.6 million year-to-date as of September 30, 2025, compared to the same period last year[116] - Net income attributable to Knight-Swift rose 51.1% to $72.7 million year-to-date as of September 30, 2025[116] - Total revenue for Q3 2025 reported at $1,927.1 million, compared to $1,876.7 million in Q3 2024, reflecting a year-over-year increase[141] - Total revenue for Q3 2025 was $1,927,057, a 2.7% increase from $1,876,676 in Q3 2024[239] - Adjusted Net Income Attributable to Knight-Swift for the quarter ended September 30, 2025, was $51,281,000, compared to $54,447,000 in 2024[234] - Adjusted EPS for the quarter ended September 30, 2025, was $0.32, compared to $0.34 in 2024[235] Segment Performance - Truckload segment reported a 96.5% operating ratio with a 3.0% year-over-year decrease in revenue, excluding fuel surcharge[117] - LTL segment's operating ratio was 97.4%, deteriorating 410 basis points year-over-year due to start-up costs and integration expenses from the DHE Acquisition[117] - Logistics segment achieved a 95.7% operating ratio with a 2.1% year-over-year revenue increase and an 8.3% rise in revenue per load[117] - Intermodal segment's operating ratio was 102.8%, with a 6.9% decrease in load count year-over-year[117] - Total revenue for the Truckload segment was $1,236,634, a decrease of 1.7% year-over-year, while year-to-date revenue was $3,643,220, down 3.8% from the previous year[152] - LTL segment total revenue increased to $394,501 in Q3 2025 from $325,412 in Q3 2024, representing a growth of 21.2%[247] - Intermodal segment revenue fell by 8.4% year-over-year to $94,083,000 in Q3 2025[174] Cash Flow and Liquidity - Operating cash flows generated during the year-to-date period were $543.4 million, with Free Cash Flow of $136.1 million[116] - As of September 30, 2025, the company had $192.7 million in unrestricted cash and cash equivalents and $2.7 billion in outstanding debt[116] - Free cash flow for the year-to-date September 30, 2025, was $136,092,000, reflecting strong operational cash generation[251] - Total unrestricted liquidity as of September 30, 2025, was $969,958,000, including $192,677,000 in cash and cash equivalents[253] Cost and Expense Management - Consolidated salaries, wages, and benefits increased by $28.9 million in Q3 2025 compared to Q3 2024, primarily due to a $31.6 million increase in LTL wages from service center expansion[187] - Fuel expenses for Q3 2025 increased by $8.3 million, driven by higher average weekly DOE fuel prices of $3.76 per gallon compared to $3.69 per gallon in Q3 2024[191] - Insurance and claims expenses increased by 34.7% in Q3 2025 to $116.5 million, reflecting higher premiums and claims frequency[196] - The company expects labor costs to remain inflationary, leading to potential future pay increases for both driving associates and non-driver employees[186] - The company continues to focus on cost control, network balance, and equipment utilization to drive appropriate returns[176] Future Outlook - Logistics segment revenue and adjusted operating income expected to increase mid-teens percent sequentially in Q4 2025[127] - Truckload segment revenue expected to remain stable sequentially with operating margins improving by 250 to 350 basis points[128] - LTL segment revenue growth projected between 10% to 15% year-over-year in Q4 2025, excluding fuel surcharge[128] - Intermodal segment load count expected to improve mid single-digit percent sequentially[133] - Anticipated net cash capital expenditures for full-year 2025 expected to range between $475 million and $525 million[133] Operational Challenges - Freight markets remain volatile, with steady truckload demand but cautious shipper engagement and modest rate improvements observed[121] - The trucking industry is experiencing a qualified driver shortage, resulting in increased compensation for driving associates[274] - Prolonged inflation could lead to rising interest rates, fuel costs, wages, and other operational costs[274] - Any increase in operational costs could adversely affect results unless freight rates increase correspondingly[274] Tax and Regulatory - Effective tax rate on adjusted income before taxes expected to be approximately 23% to 24% for Q4 2025[133] - The effective tax rate for the third quarter of 2025 was 47.0%, compared to 32.0% for the third quarter of 2024[228] - Year-to-date effective tax rate for September 30, 2025, was 30.4%, compared to 32.2% for the same period in 2024[229]

Core Viewpoint - The previous investment stance on Knight-Swift Transportation Holdings Inc. (NYSE: KNX) was a hold rating due to weak freight volumes, soft margins in LTL, and unsatisfactory TL pricing [1] Company Analysis - The investment strategy focuses on long-term investments while also considering short-term shorts to identify alpha opportunities [1] - The approach is centered on bottom-up analysis, examining the fundamental strengths and weaknesses of individual companies [1] - The investment horizon is medium to long-term, aiming to find companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Knight-Swift Transportation Holdings Inc. has experienced a significant decline in net income, leading to a negative investor sentiment and a continued losing streak in its stock performance [1][3]. Financial Performance - In the third quarter, Knight-Swift's net income dropped to $7.86 million from $30.46 million, marking a 74.2% decrease [1][2]. - Total revenues increased by 2.7% year-on-year, rising to $1.93 billion from $1.88 billion [2]. Impairment and Costs - The current quarter included $34.8 million in impairment charges and a loss contingency of $11.2 million related to exiting the third-party carrier insurance business in 2024 [3]. - Additionally, there were $12 million in higher insurance and claims costs at US Xpress, primarily due to the settlement of two large auto liability claims [3]. Industry Context - The trucking industry is facing an oversupply of capacity, although volumes in the truckload business have remained stable [4]. - The CEO of Knight-Swift indicated a focus on cost reduction and high service levels to support customers amid these challenges [4]. Future Outlook - The CEO mentioned potential catalysts that could accelerate the exit of excess capacity in the market, including stricter enforcement of language proficiency requirements and enhanced qualifications for non-domiciled Commercial Driver's Licenses [5].

Core Viewpoint - Knight-Swift Transportation's stock fell by 6.4% following the company's forecast of adjusted earnings per share for Q4 between $0.34 and $0.40, driven primarily by growth in its less-than-truckload (LTL) freight network [1] Company Summary - Knight-Swift Transportation (KNX) experienced a decline in stock price, indicating market reaction to earnings guidance [1] - The company's projected adjusted earnings per share for the fourth quarter is estimated to be between $0.34 and $0.40 [1] - Growth in the company's less-than-truckload freight network is cited as a key factor influencing the earnings forecast [1]

Core Viewpoint - Knight-Swift Transportation's third-quarter earnings report missed analysts' expectations, leading to a 3.5% decline in after-hours trading, and the fourth-quarter outlook is below consensus estimates [1][4]. Financial Performance - The company reported third-quarter adjusted earnings per share (EPS) of 32 cents, missing the consensus estimate of 37 cents and management's guidance of 36 to 42 cents [3][4]. - The headline EPS for the quarter was only 5 cents, with $58 million of "unusual items" impacting the results [3]. - Fourth-quarter guidance was issued at 34 to 40 cents, compared to a 40-cent consensus estimate [4]. Operational Insights - Knight-Swift's truckload (TL) unit experienced a 2% year-over-year decline in revenue, attributed to a 7% decrease in average tractors in service, although this was partially offset by a 5% increase in revenue per tractor [5]. - The company noted improvements in loaded miles per tractor, which increased by 5% year-over-year for eight of the past nine quarters [5]. - The adjusted operating ratio for the TL unit was reported at 96.2%, which is 60 basis points worse year-over-year and 160 basis points worse sequentially [6]. Market Conditions - The company is observing early impacts on the driver pool due to the cessation of non-domiciled CDL issuances and increased enforcement of English language proficiency [2]. - Early bid season activity is showing low-single-digit rate increases, with reduced customer churn as shippers consolidate their carrier partnerships [2]. - Knight-Swift remains focused on cost-cutting and attracting appropriately-priced freight to its network [2].

Core Insights - Knight-Swift Transportation Holdings reported $1.93 billion in revenue for Q3 2025, a year-over-year increase of 2.7% [1] - The EPS for the same period was $0.32, down from $0.34 a year ago, indicating a decline in earnings [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.9 billion by 1.66%, while the EPS fell short of the consensus estimate of $0.38 by 15.79% [1] Financial Performance Metrics - Adjusted Operating Ratio was reported at 93.8%, slightly above the average estimate of 93.5% [4] - Operating Ratio stood at 97.4%, significantly higher than the average estimate of 94.5% [4] - Revenue excluding truckload and LTL fuel surcharge was $1.72 billion, surpassing the average estimate of $1.68 billion, reflecting a year-over-year change of 2.4% [4] - Truckload and LTL fuel surcharge revenue was $206.17 million, exceeding the average estimate of $201.16 million, with a year-over-year increase of 5.3% [4] - Operating revenue for LTL was $394.5 million, slightly below the average estimate of $395.14 million, but showing a year-over-year increase of 21.2% [4] - Revenue excluding fuel surcharge for the LTL segment was $340.49 million, compared to the average estimate of $343.8 million, marking a 21.5% year-over-year increase [4] - Operating revenue for Intermodal was $94.08 million, below the average estimate of $95.35 million, reflecting an 8.4% year-over-year decline [4] - Revenue for the Truckload segment, excluding fuel surcharge and intersegment transactions, was $1.08 billion, matching the average estimate, but showing a 2.1% year-over-year decrease [4] - Operating revenue for Logistics was $140.4 million, exceeding the average estimate of $135.07 million, but reflecting a 2.2% year-over-year decline [4] - Operating revenue for Truckload was $1.24 billion, slightly above the average estimate of $1.23 billion, indicating a 1.7% year-over-year decrease [4] Stock Performance - Knight-Swift's shares have returned +20.3% over the past month, significantly outperforming the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance in the near term [3]

Group 1: Earnings Performance - Knight-Swift Transportation Holdings reported quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.38 per share, and showing a decrease from $0.34 per share a year ago, representing an earnings surprise of -15.79% [1] - The company posted revenues of $1.93 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.66%, and an increase from year-ago revenues of $1.88 billion [2] Group 2: Stock Performance and Outlook - Knight-Swift shares have lost about 10.5% since the beginning of the year, while the S&P 500 has gained 14.5% [3] - The current consensus EPS estimate for the coming quarter is $0.43 on $1.92 billion in revenues, and $1.42 on $7.5 billion in revenues for the current fiscal year [7] Group 3: Industry Context - The Transportation - Truck industry is currently in the bottom 7% of over 250 Zacks industries, indicating a challenging environment for stocks in this sector [8] - Old Dominion Freight Line, another company in the same industry, is expected to report quarterly earnings of $1.22 per share, reflecting a year-over-year change of -14.7% [9]