Knight, Werner, Landstar Report Lower First-Quarter Earnings
Three major truckload carriers reported weaker first-quarter results in the challenging freight market.
Knight Transportation Inc. reported net income declined 24%, citing excess capacity and inventory and weak industrial production. Werner Enterprises earnings dropped 13%, and Landstar System Inc. profits fell 3%,
At Knight, revenue slipped 6.3% to $272.1 million, including fuel surcharge and 1.4% excluding those fees. Net income was $22.6 million, or 28 cents per share.
“Freight volumes and revenue per loaded mile remained relatively stable during the first quarter compared with the 2015 quarter,” CEO Dave Jackson said about Knight, which ranks No. 31 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire companies. “The more competitive freight environment and fewer noncontract opportunities have begun to pressure our overall revenue per loaded mile,” particularly citing more competition from brokers.
The Phoenix-based company also cited growing cost pressure tied to driver pay.
Knight attributed 7 cents of the earnings decline to a smaller gain on equipment sales, a higher tax rate and a loss from exiting the produce-sourcing business.
Werner Enterprises, No. 16, earned $20.1 million, or 28 cents per share. Revenue dropped 3% to $482.8 million. Like Knight, Werner noted difficult conditions.
“Our first-quarter 2016 freight demand was softer than the first quarters of 2015 and 2014,” Werner’s statement said. “However, it was consistent with our average freight demand in the first quarters of 2013 and 2012. Demand showed normal seasonality in first-quarter 2016. Freight demand to date in April 2016 has been sluggish and softer than most April periods.”
The worsening used-truck market also hurt Werner, based in Omaha, Nebraska, where gains on sale were reduced by $2.1 million and an unidentified major customer canceled a deal to buy several hundred trucks.
No. 10 Landstar net income was $29.2 million, or 69 cents. Revenue slipped 7% to $711.6 million.
Van freight revenue at Jacksonville, Florida-based Landstar fell 5% to $428.2 million as loads moved in that equipment rose 4%. Flatbed revenue was 13% lower at $209.4 million, but shipments rose 1%. Less-than-truckload linehaul loads rose 3%.
“Our truckload services experienced pricing pressure throughout the 2016 first quarter, as industrywide truck capacity was more readily available,” CEO Jim Gattoni said.
