Knight-Swift Transportation (US:KNX)2024-10-30 17:19Financial Performance - Consolidated operating income decreased 48.3% to $165.4 million for the year-to-date period ended September 30, 2024, compared to the same period last year[68]. - Net income attributable to Knight-Swift decreased 78.9% to $48.1 million for the year-to-date period ended September 30, 2024[68]. - Year-to-date net income decreased by $179.7 million to $48.1 million for the period ended September 30, 2024, compared to $227.8 million in the same period last year[79]. - Total revenue for Q3 2024 was $1,876.7 million, down from $2,019.9 million in Q3 2023[80]. - Adjusted Net Income Attributable to Knight-Swift for Q3 2024 was $54,447 thousand, compared to $67,162 thousand in Q3 2023, reflecting a decrease of 19%[126]. - Adjusted EPS for Q3 2024 was $0.34, down from $0.41 in Q3 2023, representing a decline of 17%[127]. - GAAP net income attributable to Knight-Swift for Q3 2024 was $30,464 thousand, compared to $60,194 thousand in Q3 2023, indicating a decrease of 49%[126]. - Total revenue for the quarter ended September 30, 2024, was $102.7 million, a 1.4% increase compared to $101.2 million in the same quarter of 2023[100]. Segment Performance - Truckload segment reported a 97.6% operating ratio, with a 14.9% year-over-year increase in revenue, excluding fuel surcharge and intersegment transactions, due to the inclusion of U.S. Xpress[68]. - LTL segment achieved a 91.5% operating ratio, with an adjusted operating ratio of 88.5%, primarily due to increased operating, maintenance, and labor costs[68]. - Logistics segment reported a 96.5% operating ratio, with revenue decreasing 2.7% and load count down 11.5% due to soft demand[68]. - Intermodal segment had a 102.8% operating ratio, with revenue per load declining 10.0% year-over-year[68]. - Truckload segment revenue for Q3 2024 was $1,258.2 million, a decrease of 8.9% compared to $1,380.8 million in Q3 2023[89]. - LTL segment revenue for Q3 2024 increased to $325,412 from $284,168 in Q3 2023, but operating income decreased to $24,556 from $32,275[132]. - Total revenue for the Logistics Segment was $143,581 thousand for the quarter ended September 30, 2024, down from $159,489 thousand in the same quarter of 2023, representing a decrease of 9.5%[133]. - The Intermodal Segment reported total revenue of $102,679 thousand for the quarter ended September 30, 2024, slightly up from $101,219 thousand in the same quarter of 2023, indicating a growth of 1.4%[134]. Cash Flow and Liquidity - Generated $524.7 million in operating cash flows and $116.2 million in Free Cash Flow during the year-to-date period ended September 30, 2024[68]. - As of September 30, 2024, Knight-Swift had $166.3 million in unrestricted cash and cash equivalents and $7.1 billion in stockholders' equity[68]. - Year-to-date cash flows from operations amounted to $524,741 thousand, a decrease of 66.5% compared to $873,502 thousand for the same period in 2023[140]. - Free cash flow for the year-to-date September 30, 2024, was reported at $116,249 thousand[135]. - The company reported a working capital surplus of $8.1 million as of September 30, 2024, a significant improvement from a working capital deficit of $116.3 million as of December 31, 2023[138]. Cost and Expense Management - Fuel expenses for Q3 2024 were $213.5 million, a decrease of 21.6% from $272.4 million in Q3 2023[106]. - Salaries, wages, and benefits increased by 2.2% to $726.4 million in Q3 2024, representing 38.7% of total revenue[105]. - Operations and maintenance expense for Q3 2024 was $142,418 thousand, a slight decrease of 0.3% compared to Q3 2023, while year-to-date expenses increased by 20.9% to $415,302 thousand[108]. - The company expects labor costs to remain inflationary, leading to potential future pay increases[105]. - The company expects to prudently decrease idle tractor and trailer capacity to reduce operations and maintenance expenses while remaining well-positioned for potential market changes[108]. Market and Economic Conditions - The national unemployment rate increased to 4.1% as of September 30, 2024, compared to 3.8% a year earlier[71]. - The US GDP grew by 3.0% quarter-over-quarter, up from 1.6% in the previous quarter, driven by increased consumer spending and private inventory investment[71]. - Inflation-sensitive operating expenses have increased due to rising costs in equipment, parts, and driver compensation, potentially affecting overall operational results[144]. Future Outlook and Strategic Initiatives - The company opened 34 new locations in the LTL segment and acquired the assets of DHE effective July 30, 2024[68]. - The company expects to open 4 more service centers by the end of 2024, enhancing its operational capacity[95]. - The company plans to purchase rather than lease the majority of its revenue equipment and terminal improvements in the remainder of 2024, which may increase depreciation and amortization expenses[113]. - The company has contracted with fuel suppliers to buy fuel at fixed prices to mitigate rising fuel costs, although these commitments cover only a small portion of total fuel consumption[148].