Core Insights - Knight-Swift Transportation Holdings reported a revenue of $1.82 billion for Q1 2025, reflecting a year-over-year increase of 0.1% and an EPS of $0.28, up from $0.12 a year ago, indicating strong earnings growth [1] - The revenue exceeded the Zacks Consensus Estimate of $1.81 billion by 1.03%, while the EPS surpassed the consensus estimate of $0.25 by 12% [1] Financial Performance Metrics - Adjusted Operating Ratio was reported at 94.7%, matching the average estimate from five analysts, while the Operating Ratio was 96.3%, slightly above the average estimate of 95.7% [4] - Revenue excluding truckload and LTL fuel surcharge was $1.63 billion, exceeding the average estimate of $1.60 billion, representing a year-over-year change of 1.3% [4] - LTL Segment revenue, excluding fuel surcharge, was $305.26 million, surpassing the estimated $294.25 million, marking a significant year-over-year increase of 26.7% [4] - Operating revenue for the Intermodal segment was $91.10 million, which was below the estimated $99.98 million but still showed a year-over-year increase of 3.5% [4] - Operating revenue for the LTL segment was $352.40 million, exceeding the average estimate of $337.40 million, reflecting a year-over-year growth of 24.9% [4] - Truckload segment revenue was $1.05 billion, aligning with the average estimate but showing a year-over-year decline of 4.2% [4] Stock Performance - Knight-Swift's shares have returned -11.9% over the past month, underperforming the Zacks S&P 500 composite, which saw a decline of -6.6% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance in the near term [3]

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Knight-Swift shares have lost about 26.4% since the beginning of the year versus the S&P 500's decline of -10.1%. What's Next for Knight-Swift? While Knight-Swift has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Knight-Swift Transportation ...

Financial Performance - Knight-Swift reported Q1 2025 net income of $30.6 million, a significant recovery from a net loss of $2.6 million in Q1 2024[1][3]. - Total revenue for Q1 2025 was $1.8 billion, reflecting a 0.1% increase year-over-year, while operating income surged 224.3% to $66.7 million[2][3]. - Adjusted EPS for Q1 2025 was $0.28, up 133.3% from $0.12 in Q1 2024, with GAAP EPS at $0.19 compared to a loss of $0.02 in the prior year[1][3]. - Operating income increased to $66,663,000 from $20,555,000 year-over-year[42]. - Adjusted Net Income Attributable to Knight-Swift for Q1 2025 was $45,372 thousand, up from $19,774 thousand in Q1 2024[53]. - Earnings per diluted share for Q1 2025 was $0.19, compared to a loss of $0.02 in Q1 2024[54]. - Free cash flow for Q1 2025 was reported at $69,991, after adjusting for cash flows from operations of $109,429 and capital expenditures of $122,048[67]. Segment Performance - The Truckload segment's revenue, excluding fuel surcharge, decreased by 4.2% year-over-year, but Adjusted Operating Income increased by 59.7%[5][12]. - LTL segment revenue grew 26.7% year-over-year, driven by a 24.2% increase in shipments per day, despite a decline in Adjusted Operating Income by 26.8% due to start-up costs[5][15][17]. - Logistics segment revenue increased by 11.8% year-over-year, with an Adjusted Operating Ratio of 95.5% and a gross margin of 18.1%[5][21]. - Intermodal segment revenue rose 3.5% year-over-year, with an improved operating ratio of 102.0%, down 360 basis points from the previous year[5][22]. - In Q1 2025, the Truckload segment reported total revenue of $1,192,550, a decrease from $1,263,015 in Q1 2024, while operating income increased to $44,600 from $23,147[59]. - The LTL segment's total revenue rose to $352,401 in Q1 2025 from $282,122 in Q1 2024, but operating income decreased to $12,694 from $20,287[63]. - The Logistics segment achieved revenue of $141,621 in Q1 2025, up from $126,729 in Q1 2024, with operating income increasing to $5,143 from $2,473[65]. - The Intermodal segment reported revenue of $91,103 in Q1 2025, slightly up from $87,985 in Q1 2024, with an operating loss reduced to $1,812 from $4,908[65]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased significantly to $109,429,000 from $37,275,000, a change of $72,154,000[25]. - Free Cash Flow for the quarter was $70,000,000, reflecting $109,429,000 in operating cash flows and $39,438,000 in cash capital expenditures[27]. - Expected net cash capital expenditures for the full year 2025 are projected to be between $575 million and $625 million[27]. - The company had $1.0 billion in unrestricted cash and available liquidity as of March 31, 2025[27]. Tax and Dividend Information - The effective tax rate for GAAP results was 25.4% in Q1 2025, a significant decrease from 55.1% in Q1 2024[10]. - The adjusted effective tax rate for Q1 2025 was 25.4%, compared to 19.7% in Q1 2024[58][67]. - The company declared a quarterly cash dividend of $0.18 per share, an increase from the previous $0.16 per share[11]. Operational Metrics - Average revenue per tractor in the Truckload segment increased by 1.9% to $47,838[45]. - Shipments per day in the LTL segment rose by 24.2% to 23,349[45]. - Average length of haul in the LTL segment increased by 11.5% to 639 miles[45]. - Operating ratio improved to 96.3% in Q1 2025 from 98.9% in Q1 2024[50]. - The adjusted operating ratio for the Truckload segment improved to 95.6% in Q1 2025 from 97.3% in Q1 2024[59]. Other Financial Information - Revenue for the All Other Segments decreased by 15.9% year-over-year to $85,079,000, primarily due to the winding down of the third-party carrier insurance program[24]. - Operating income for All Other Segments was a loss of $20,444,000, compared to an operating income of $6,038,000 in the previous year[23]. - Total current assets as of March 31, 2025, were $1,454,857 thousand, slightly up from $1,448,741 thousand as of December 31, 2024[44]. - Total liabilities decreased to $5,483,267 thousand from $5,581,727 thousand[44]. - The total operating expenses for the Truckload segment were $1,147,950 in Q1 2025, down from $1,239,868 in Q1 2024[59]. - The company recognized non-cash impairments of $28 in Q1 2025, compared to $3,099 in Q1 2024[59]. - Legal accruals in Q1 2025 included increased estimated exposure for accrued legal matters, impacting miscellaneous operating expenses[56].

Core Viewpoint - Knight-Swift Transportation Holdings (KNX) is expected to report quarterly earnings of $0.25 per share, reflecting a year-over-year increase of 108.3%, while revenues are anticipated to decline by 0.9% to $1.81 billion [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 12.5%, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue and Key Metrics - Analysts estimate 'Revenue, excluding truckload and LTL fuel surcharge' at $1.60 billion, a year-over-year change of -0.8% [5]. - The 'Truckload and LTL fuel surcharge' is projected to reach $185.70 million, down 11.4% from the previous year [5]. - 'Operating revenue- LTL' is expected to be $337.40 million, reflecting a year-over-year increase of 19.6% [6]. - The consensus for 'Revenue, excluding fuel surcharge and intersegment transactions- Truckload Segment' is $1.05 billion, indicating a decline of 3.7% year-over-year [6]. Operating Ratios - The average 'Operating Ratio' is projected at 95.7%, improving from 98.9% in the same quarter last year [6]. - The 'Adjusted Operating Ratio' is expected to be 94.7%, compared to 96.8% in the previous year [7]. - For 'Adjusted Operating Ratio - Truckload', the estimate is 95.3%, down from 97.3% year-over-year [7]. - The 'Adjusted Operating Ratio - LTL' is projected at 93.4%, compared to 90% in the same quarter last year [8]. - The 'Adjusted Operating Ratio - Logistics' is expected to be 93.7%, down from 97.1% in the previous year [8]. Operational Metrics - The consensus for 'Average tractors - Truckload' is 21,818, down from 23,314 year-over-year [9]. - 'Load count - Intermodal' is expected to reach 38,120, an increase from 33,647 in the previous year [9]. - The 'Average revenue per load - Intermodal' is projected at $2,684.32, compared to $2,615 last year [9]. Market Performance - Knight-Swift shares have returned -11.3% over the past month, underperforming the Zacks S&P 500 composite, which declined by -5.6% [9].

Core Viewpoint - Knight-Swift Transportation Holdings is expected to report a year-over-year increase in earnings despite lower revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is anticipated on April 23, 2025, with an expected EPS of $0.25, reflecting a +108.3% change year-over-year, while revenues are projected at $1.81 billion, down 0.9% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 12.49% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Knight-Swift is lower than the consensus estimate, resulting in an Earnings ESP of -2.25% [10][11]. Historical Performance - Knight-Swift has beaten consensus EPS estimates in two out of the last four quarters, with a recent surprise of +9.09% when it reported earnings of $0.36 against an expectation of $0.33 [12][13]. Investment Considerations - The combination of a negative Earnings ESP and a Zacks Rank of 4 indicates challenges in predicting an earnings beat for Knight-Swift, suggesting that investors should consider additional factors before making investment decisions [11][16].

Company Overview - Knight-Swift Transportation Holdings Inc. (KNX) is currently facing multiple headwinds, making it an unimpressive investment option [1] - The company's shares have lost 26% year-to-date, compared to a 22.4% decline in the transportation-truck industry [2] Earnings Estimates - The Zacks Consensus Estimate for first-quarter 2025 earnings has been revised downward by 9.6% in the past 90 days [2] - For the current year, the consensus mark for earnings has been revised down by 7.4% in the same timeframe, indicating a lack of confidence from brokers [2] Financial Performance - KNX has a Zacks Rank of 5 (Strong Sell) and a Value Score of C, reflecting its unattractiveness [6] - The company has a negative earnings surprise history, lagging the Zacks Consensus Estimate in two of the last four quarters with an average miss of 8.96% [6] Cost Structure - High costs related to driver wages, equipment, maintenance, and fuel are restricting bottom-line growth, with salaries, wages, and benefits expenses rising 13.8% year-over-year in 2024 [7] - Total operating expenses increased by 5.3% year-over-year to $7.16 billion in 2024 [7] Leverage and Debt - KNX's cash and equivalents were $166.35 million at the end of Q3 2024, which is significantly lower than its long-term debt of $1.50 billion, indicating insufficient cash to meet debt obligations [8] Industry Context - The trucking industry is facing a persistent driver shortage, complicating recruitment as older drivers retire and younger generations show little interest in these jobs [9] - The industry has a Zacks Industry Rank of 234 out of 248 groups, placing it in the bottom 5%, which negatively impacts stock performance [10]

Group 1: Market Overview - The freight and logistics market is experiencing volatility, leading to weaker revenues for companies like Knight-Swift Transportation, Inc. due to softer demand [1] - Despite the challenging market conditions, Knight-Swift maintains operational efficiency, which helps stabilize its margins and profitability [1] Group 2: Company Performance - Knight-Swift Transportation has excellent liquidity, which is a positive indicator for its financial health amidst the current market challenges [1]

Core Viewpoint - Knight-Swift Transportation Holdings reported a mixed performance in its latest earnings report, with adjusted earnings exceeding estimates but total revenues falling short, indicating potential challenges ahead for the company [1][2][3]. Financial Performance - Adjusted earnings for Q4 2024 were 36 cents per share, surpassing the Zacks Consensus Estimate of 33 cents and showing over 100% year-over-year improvement [2]. - Total revenues amounted to $1.86 billion, missing the Zacks Consensus Estimate of $1.89 billion and declining 3.5% year-over-year [3]. - Operating expenses decreased by 6.6% year-over-year to $1.78 billion, leading to an improved adjusted operating ratio of 93.7%, which is over 300 basis points better than the prior-year quarter [3]. Segment Performance - Truckload segment revenues totaled $1.10 billion, down 4.4% year-over-year, with adjusted operating income increasing by 22.9% to $85.96 million [4]. - The Less-Than-Truckload segment generated revenues of $278.89 million, up 20.2% year-over-year, but adjusted operating income fell 54.9% to $15.21 million [5]. - Logistics revenues were $167.99 million, a 2.1% year-over-year increase, while intermodal revenues reached $99.04 million, up 4.9% year-over-year [6]. Liquidity and Debt - Knight-Swift ended Q4 with cash and cash equivalents of $218.26 million, an increase from $166.34 million in the previous quarter, while long-term debt decreased to $1.44 billion from $1.50 billion [8]. Guidance - The company expects adjusted EPS for Q1 2025 to be in the range of 29-33 cents and for Q2 2025 to be between 46-50 cents [9]. - Net cash capital expenditures for 2025 are projected to be between $575 million and $625 million, with an expected tax rate of 24.5-25.5% [10]. Market Sentiment - Estimates for Knight-Swift have trended upward over the past month, with the stock currently holding a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [11][13]. - The company has a subpar Growth Score of D, a Momentum Score of C, and a Value Score of C, placing it in the middle 20% for investment strategy [12].

Financial Performance - Consolidated total revenue for 2024 was $7.4 billion, a 3.8% increase from 2023[269] - Consolidated net income attributable to Knight-Swift decreased by 45.8% to $117.6 million in 2024[269] - Total revenue for 2024 reached $5,034,941, a 7.2% increase from $4,698,655 in 2023[288] - The operating income for 2024 was $243,388 thousand, down from $338,153 thousand in 2023, indicating a decrease of around 28.0%[353] - The adjusted net income attributable to Knight-Swift for 2024 was $172,085 thousand, compared to $278,739 thousand in 2023, reflecting a decline of about 38.2%[348] - The adjusted operating income for 2024 was $347,867 thousand, compared to $434,578 thousand in 2023, which is a decline of about 20.0%[353] - The effective tax rate for 2024 was 22.1%, compared to 20.3% in 2023, primarily due to reduced pre-tax earnings and tax benefits from mark-to-market adjustments[341] Segment Performance - Truckload segment reported a 96.7% operating ratio in 2024, with a 9.4% increase in revenue, excluding fuel surcharge[270] - LTL segment achieved a 92.9% operating ratio in 2024, with a 16.2% increase in revenue, excluding fuel surcharge[270] - Logistics segment experienced a 95.9% operating ratio in 2024, with an 11.1% decrease in load count leading to a 1.3% decrease in revenue[270] - Intermodal segment had a 102.4% operating ratio in 2024, with a 3.5% increase in load count resulting in a 10.0% decrease in operating loss[270] - The truckload segment's total revenue for 2024 was $4,698,655 thousand, a decrease from $5,034,941 thousand in 2023, representing a decline of about 6.7%[357] - Total revenue for the LTL segment increased to $1,235,547,000 in 2024 from $1,082,454,000 in 2023, representing a growth of approximately 14.2%[360] - Total revenue for the Logistics segment decreased to $570,001,000 in 2024 from $582,250,000 in 2023, a decline of approximately 2.5%[362] - Total revenue for the Intermodal segment decreased to $387,232,000 in 2024 from $410,549,000 in 2023, reflecting a decline of about 5.7%[363] Cash Flow and Liquidity - Operating cash flows generated in 2024 amounted to $799.1 million, with Free Cash Flow at $233.8 million[270] - The company ended 2024 with $1.1 billion in unrestricted cash and cash equivalents[270] - Net cash provided by operating activities was $799,063,000 in 2024, down from $1,161,676,000 in 2023, a decrease of approximately 31.2%[379] - Free cash flow for 2024 was reported at $233,836,000, indicating a significant cash generation capability despite operational challenges[364] - Total unrestricted liquidity as of December 31, 2024, was $1,082,493,000, providing a solid financial cushion for the company[366] Expenses and Costs - Consolidated salaries, wages, and benefits increased by 13.8% to $2.82 billion in 2024, influenced by the full-year expense of U.S. Xpress[308] - Fuel expenses decreased by 0.8% to $871.1 million in 2024, attributed to lower average weekly fuel prices of $3.76 per gallon compared to $4.20 in 2023[311] - Operations and maintenance expenses rose by 15.5% to $546.9 million in 2024, driven by the inclusion of U.S. Xpress expenses and increased maintenance costs[314] - Insurance and claims expenses decreased by 31.8% to $415.7 million in 2024, reflecting the exit from the third-party insurance business[316] - Interest expense increased by 34.7% to $171.2 million, due to higher interest rates and increased average debt balance[335] Operational Metrics - Average tractors in the Truckload segment increased to 22,791 in 2024 from 20,948 in 2023[271] - Average revenue per tractor in the Truckload segment decreased by 7.6% to $193,436[288] - LTL shipments per day increased by 9.8% to 20,756, reflecting growth in operational capacity[294] - Logistics load count, excluding U.S. Xpress, declined by 26.3% year-over-year, while including U.S. Xpress, the decline was 11.1%[300] Future Outlook - The company expects labor costs to remain inflationary, impacting future salaries, wages, and benefits expenses[309] - The company expects net cash capital expenditures to be in the range of $575,000,000 to $625,000,000 in 2025, focusing on fleet replacements and network expansions[367] Miscellaneous - The average diesel price per gallon in the US decreased to $3.76 for 2024 from $4.20 for 2023, impacting operating costs related to fuel[412] - A hypothetical one percentage point increase in interest rates would increase annual interest expense by $21.1 million, given the current variable interest rate exposure[411] - Claims accruals could increase by $43.4 million if claims development factors based on historical experience increased by 10%[385] - The company has a weighted average interest rate of 6.0% as of December 31, 2024, related to its variable rate debt[411] - The company experienced inflation-sensitive operating expenses, impacting costs for equipment acquisition, repairs, and driver compensation[383] - Fair value assessments for goodwill and indefinite-lived intangible assets were conducted, confirming that fair value exceeded carrying value as of June 30, 2024[390] - The company has not used derivative financial instruments to hedge fuel price exposure but continues to evaluate this possibility[412] - Management's estimates and assumptions significantly impact the reported amounts of assets, liabilities, revenue, and expenses in the financial statements[384]

Earnings Performance - Knight-Swift Transportation Holdings Inc (KNX) reported Q4 2024 adjusted earnings of 36 cents per share, beating the Zacks Consensus Estimate of 33 cents and showing a 300% year-over-year improvement [1] - The earnings improvement was driven by the closure of the third-party insurance business, which had generated a $71.7 million operating loss in Q4 2023, and a 5.8 percentage point decrease in the effective tax rate [1] - Total revenues of $1.86 billion missed the Zacks Consensus Estimate of $1.89 billion and declined 3.5% year-over-year [2] - Revenues excluding truckload and LTL fuel surcharge fell 0.9% year-over-year to $1.67 billion [2] - Total operating expenses decreased 6.6% year-over-year to $1.78 billion [2] - The adjusted operating ratio improved by more than 300 basis points to 93.7% [2] Segment Performance - Truckload segment revenues (excluding fuel surcharge) totaled $1.10 billion, down 4.4% year-over-year due to a 3.7% decrease in loaded miles [4] - Adjusted Truckload operating income grew 22.9% year-over-year to $85.96 million, with the adjusted operating ratio improving by 170 basis points to 92.2% [4] - Less-Than-Truckload (LTL) segment revenues (excluding fuel surcharges) increased 20.2% year-over-year to $278.89 million, driven by a 13.3% increase in shipments per day [5] - Adjusted LTL operating income decreased 54.9% to $15.21 million, with the adjusted operating ratio rising 900 basis points to 94.5% [5] - Logistics segment revenues (excluding inter-segment transactions) increased 2.1% year-over-year to $167.99 million, but adjusted operating income decreased 6.4% to $10.56 million [6] - Intermodal revenues (excluding inter-segment transactions) increased 4.9% year-over-year to $99.04 million, driven by a 10.2% increase in load count [7] - All Other Segments revenues declined 36.4% year-over-year to $44.7 million due to the winding down of the third-party carrier insurance program [8] Liquidity and Guidance - Knight-Swift ended Q4 with cash and cash equivalents of $218.26 million, up from $166.34 million at the end of the prior quarter [9] - Long-term debt (excluding current maturities) decreased to $1.44 billion from $1.50 billion at the end of the prior quarter [9] - Adjusted earnings for Q1 2025 are expected to be in the range of 29-33 cents per share, with the Zacks Consensus Estimate at 31 cents [10] - For Q2 2025, adjusted earnings are expected to be in the range of 46-50 cents per share, with the Zacks Consensus Estimate at 52 cents [10] - Net interest expense is expected to decrease modestly in Q1 2025 and remain stable into Q2 2025 [11] - Net cash capital expenditures for 2025 are expected to be in the range of $575 million to $625 million [11] - The adjusted tax rate for 2025 is expected to be around 24.5-25.5% [11] Industry Comparison - Delta Air Lines (DAL) reported Q4 2024 earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.76 and showing a 44.5% year-over-year increase [15] - DAL's revenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% year-over-year, driven by strong holiday travel demand [16] - J.B. Hunt Transport Services (JBHT) reported Q4 2024 earnings per share of $1.53, missing the Zacks Consensus Estimate of $1.62 but showing a 4.1% year-over-year increase [17] - JBHT's total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year-over-year due to lower fuel surcharge revenues and yield pressure in its Intermodal segment [17] Stock Performance - KNX shares have gained 10.6% over the past six months, outperforming the 3.1% rise of the industry [12]