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Sep 30, 2023
Knight-Swift Q3 2023 Earnings Report
Knight-Swift reported mixed results for Q3 2023, with revenue increase driven by acquisition but earnings significantly down year-over-year.
Key Takeaways
Knight-Swift's Q3 2023 results showed a revenue increase of 6.5% to $2.0 billion, but net income attributable to Knight-Swift decreased by 69.1% to $60.2 million. The Adjusted EPS was $0.41, compared to $1.27 for the third quarter of 2022. The truckload segment saw revenue growth due to the U.S. Xpress acquisition, while the LTL segment showed revenue and operating income improvements. The logistics segment experienced a decline in load count, and the intermodal segment had a negative operating ratio.
Consolidated total revenue increased by 6.5% year-over-year to $2.0 billion, while operating income decreased by 69.5% to $81.1 million.
Truckload revenue increased by 21.9% year-over-year, excluding fuel surcharge and intersegment transactions, driven by the acquisition of U.S. Xpress, but this also negatively impacted the Adjusted Operating Ratio by 340 basis points.
LTL segment revenue, excluding fuel surcharge and intersegment transactions, increased by 6.9% year-over-year, with an Adjusted Operating Ratio of 84.9%.
Logistics segment Adjusted Operating Ratio was 93.3%, with load count decreasing 10.3% year-over-year excluding the U.S. Xpress logistics business, there was a 29.7% decline in load count.
Knight-Swift
Knight-Swift
Knight-Swift Revenue by Segment
Revenue by Segment
Truckload Revenue
CapyFin.comLTL Revenue
CapyFin.comLogistics Revenue
CapyFin.comIntermodal Revenue
CapyFin.com Forward Guidance
Knight-Swift expects full-year 2023 Adjusted EPS to range from $2.10 to $2.20, based on current market conditions and management's expectations.
Positive Outlook
- Truckload rates stabilize at current levels for the fourth quarter.
- Truckload tractor count down modestly sequentially.
- Excluding the results of U.S. Xpress, miles per tractor increase low single digits year-over-year in the fourth quarter.
- LTL revenue, excluding fuel surcharge increases mid-teens year-over-year in the fourth quarter with a similar margin profile.
- LTL shipment count and revenue per hundredweight, excluding fuel surcharge improve high single digit percent year-over-year in the fourth quarter.
Challenges Ahead
- U.S. Xpress Adjusted EPS dilutive impact in the fourth quarter expected to be approximately ($0.05) as performance continues to improve.
- Logistics volume and revenue per load stabilize in the fourth quarter, with an operating ratio in the low 90s.
- Intermodal Operating Ratio slightly profitable with volumes stable sequentially.
- Non-reportable operating income to decline roughly $10 million - $15 million sequentially as third-party insurance losses are expected to be $10 million - $15 million and our other businesses experience their typical seasonal slowdown.
- Expected tax rate of approximately 26% for the fourth quarter of 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income