Knight-Swift Reports 11% Revenue Increase for Q4

Results Include an Operating Loss of $71.7 Million From Its Third-Party Insurance Business
Knight-Swift lineup
Truckload segment revenue during Q4 increased 25.5% to $1.16 billion from $920.8 million during the same time the previous year. (Knight-Swift Transportation Holdings)

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Knight-Swift Transportation Holdings profits dropped during the fourth quarter but the carrier experienced an increase in revenue, the company reported Jan. 24.

The Phoenix-based truckload motor carrier posted a net loss of $10.9 million, or a loss of 7 cents a diluted share, for the three months ending Dec. 31. That compared with a net gain of $148.6 million, or 92 cents, during the same time the previous year. Revenue increased by 10.8% to $1.93 billion from $1.74 billion.

“Market conditions in the [less-than-truckload] business were strong while soft demand continues in the truckload space,” Knight-Swift CEO David Jackson said during a call with investors. “Revenue, excluding fuel surcharge, increased 11.6%, while our adjusted operating income declined by 78.6%. GAAP earnings per diluted share for the fourth quarter of 2023 was a loss of 7 cents.”

Knight-Swift noted in the report that the results include an operating loss of $71.7 million from its third-party insurance business. The insurance loss hurt adjusted earnings per share. Management has decided to exit from that business and plans to cease all third-party insurance operations by the end of the first quarter of 2024.

“The insurance loss negatively impacted our adjusted EPS by 30 cents,” Jackson said. “Excluding the loss on the insurance business, our adjusted EPS would have been 39 cents per share. Our results were also negatively impacted on a year-over-year basis by a $17.8 million increase in net interest expense, approximately 8 cents per share.”

The results were mixed when it came to expectations by investment analysts on Wall Street, who had been looking for 47 cents per share and quarterly revenue of $1.92 billion, according to Zacks Consensus Estimate.

For the full year, Knight-Swift reported net income of $215.5 million, or $1.34 a share, on revenue of $7.14 billion, compared with net income of $771.1 million, or $4.73 a share, on revenue of $7.43 billion in 2022.

Truckload segment revenue during Q4 increased 25.5% to $1.16 billion from $920.8 million during the same time the previous year. Operating income fell 58.7% to $65.8 million from $159.4 million. The report noted that the truckload segment continues to experience an extremely difficult environment. It was operating with a 93.9% adjusted operating ratio during the quarter and only experienced modest seasonal project business and freight demand. The segment consists of irregular route truckload, dedicated truckload, refrigerated, expedited, flatbed and cross-border operations.


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“Truckload freight demand saw a modest seasonal lift in November before slowing more than anticipated in December,” Jackson said. “The seasonal lift in November was not enough to offset the productivity disruption we typically experience during the holidays. This not only impacted our truckload business, but logistics and intermodal as well.”

Less-than-truckload segment revenue increased 13.8% to $232.1 million from $204 million during the prior-year quarter. Operating income increased 16.3% to $29.8 million from $25.6 million. The segment produced an 85.5% adjusted operating ratio while revenue grew with shipments per day increasing 11.9% year-over-year, revenue per hundredweight increasing 9.5% and revenue per shipment increasing 7.4%.

“Freight demand in LTL was strong and led to an 11.9% increase in shipments per day in the quarter,” Jackson said. “U.S. Xpress made further progress and achieved positive adjusted operating income in each month of the quarter, as revenue and cost per mile both improved over the third quarter.”

Logistics segment revenue decreased 5% to $164.5 million from $173.2 million. Operating income fell 53.9% to $10.7 million from $23.1 million. The U.S. Xpress logistics business improved its adjusted operating ratio to within approximately 150 basis points of the existing logistics business.

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The report also noted cost structure and pricing have improved despite the difficult market environment. The existing logistics load count declined by 22.7% year-over-year, before the addition of U.S. Xpress logistics volumes brought a 2.6% increase.

“Our existing logistics business navigated significant declines in volume and revenue per load year-over-year to maintain a low 90s adjusted operating ratio,” Jackson said. “U.S. Xpress logistics continues to close the gap, posting an adjusted operating ratio that was only 150 basis points behind our existing logistics business.”

Intermodal segment revenue decreased 16.4% to $94.4 million from $112.9 million. The segment also saw an operating loss of $4.45 million, compared to an operating gain of $5.99 million. The report noted load count increased year-over-year by 4.2%, but declined 6% sequentially. Revenue per load declined 19.7% as a result of soft demand and competitive truck capacity. Knight-Swift said it continues to be focused on growing load count and improving the efficiency of assets.

Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.