[Stay on top of transportation news: Get TTNews in your inbox.]
Knight-Swift Transportation Holdings Inc. saw earnings and revenue fall in the fourth quarter as it faced greater competition and an oversupply of truckload capacity in its key market.
Net income fell 55.5% to $67.4 million in the fourth quarter from $151.7 million in the same period a year earlier. The Phoenix motor carrier posted earnings of 39 cents per diluted share in the period compared with 86 cents a year earlier. Revenue slid 14.2% to $1.2 billion from $1.4 billion.
For the year, Knight-Swift profits dropped 26.2% to $309.2 million from $419.3 million in 2018. The company posted earnings of $1.80 per diluted share in the period compared with $2.36 cents a year earlier. Revenue slumped 9.4% to $4.8 billion from $5.3 billion in the prior year.
John Sommers II for Transport Topics
The oversupply of truckload capacity in the freight market pressured pricing in the latest quarter, the motor carrier said in a Jan. 29 statement accompanying its financial results.
Its revenue per loaded mile, excluding fuel surcharge and intersegment transactions, fell by 6.3% from the same period a year earlier. Knight-Swift’s average revenue per tractor fell by more than $5,000 in the fourth quarter to $46,708 from $51,516. The company ended the quarter with 18,695 tractors compared with 18,828 in the same period a year earlier.
“We also continued to experience increased competition in the intermodal market, which led to a 9.4% reduction in volume and 10.2% less revenue per load year-over-year,” the motor carrier said.
In part one of a two-part exploration of autonomous technology today, our latest RoadSigns podcast revisits conversations with CEOs Alex Rodrigues of Embark and Cetin Mericli of Locomation. Hear them explain what testing automated trucks and developing platooning technology has taught them about the road ahead — and get new perspective with host commentary. Listen to a snippet from Rodrigues above, and to hear the full episode, go to RoadSigns.TTNews.com.
During the quarter, the company incurred $20.3 million in additional legal costs for various issues incurred by Swift Transportation Co. prior to its 2017 merger with Knight to form the current company.
The first half of this year looks to be tough for carriers as the freight market continues to face price pressures, Knight-Swift said. There are fewer and less attractive noncontract opportunities, it added. But the down market could create some acquisition opportunities, the company said in a presentation for investors. The second half the year should see a freight uptick, the motor carrier said.
Knight-Swift lowered its earnings guidance for the current quarter. The company said it now expects to report adjusted earnings per share in the range of 35 cents to 38 cents for the first quarter. That’s down from a previous estimate of 42 cents to 46 cents.
However, that will be Knight-Swift’s last quarterly guidance report. It now will only provide full year-guidance. The company expects adjusted earnings per share for all of 2020 will range from $2 to $2.15.
Knight-Swift ranks No. 5 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Want more news? Listen to today's daily briefing: