Knight-Swift Transportation Holdings Inc. (KNX) fourth-quarter 2024 adjusted earnings of 36 cents per share beat the Zacks Consensus Estimate of 33 cents and improved 300% year over year. KNX’s bottom line benefited from the closure of the third-party insurance business in the first quarter of 2024 (as this business generated a $71.7 million operating loss in the fourth quarter of 2023) and a 5.8 percentage point decrease in the effective tax rate. The reported figure met the higher end of the guided range of 32-36 cents.

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Total revenues of $1.86 million missed the Zacks Consensus Estimate of $1.89 million and declined 3.5% year over year. Revenues, excluding truckload and LTL fuel surcharge, fell 0.9% year over year to $1.67 billion.

Total operating expenses (on a reported basis) decreased 6.6% year over year to $1.78 billion.

Knight-Swift’s adjusted operating ratio of 93.7% improved more than 300 basis points from the prior-year quarter.

Knight-Swift Transportation Holdings Inc. Price, Consensus and EPS Surprise

Knight-Swift Transportation Holdings Inc. price-consensus-eps-surprise-chart | Knight-Swift Transportation Holdings Inc. Quote

Knight-Swift’s chief executive officer, Adam Miller, stated, "The fourth quarter showed the benefits of our diversified business model, as improvement in our truckload segment offset cost headwinds from the significant expansion in our LTL segment. Truckload freight conditions in the fourth quarter largely played out as expected, as the hurricane and port strike disruptions at the beginning of the quarter gave way to a modest amount of seasonal strength, spot rate improvement, and the return of some project opportunities. Some pockets of tightness occurred in specific regions, but this was not broad-based. Similarly, not all of our brands experienced the same degree of project activity, with our larger brands receiving the most opportunities as a result of having scale with over-the-road capacity and trailer resources."

KNX’s Q4 Segmental Results

Revenues (excluding fuel surcharge and inter-segment transactions) from Truckload totaled $1.10 billion, down 4.4% year over year. This was due to a 3.7% decrease in loaded miles, mainly in the dedicated services. Our estimate is pegged at $1.11 million.

Adjusted segmental operating income grew 22.9% year over year to $85.96 million. Adjusted operating ratio (operating expenses as a percentage of revenues) fell 170 basis points (bps) to 92.2%.  

The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $278.89 million in the fourth quarter, up 20.2% year over year as shipments per day increased 13.3% year over year, including the acquisition of DHE on July 30, 2024. Our estimate for the segment stands at $276.4 million.

Adjusted segmental operating income was down 54.9% to $15.21 million. Adjusted operating ratio rose 900 bps to 94.5%.

Revenues from Logistics (excluding inter-segment transactions) amounted to $167.99 million (up 2.1% year over year), higher than our estimate of $156.2 million. Adjusted operating income decreased 6.4% year over year to $10.56 million. The adjusted operating ratio rose 60 bps to 93.7%.

Intermodal revenues (excluding inter-segment transactions) totaled $99.04 million, up 4.9% year over year owing to a 10.2% increase in load count, partially offset by a 4.8% decline in revenue per load year over year. Our estimate stands at $101.9 million. The operating ratio (on a reported basis) fell 320 bps to 101.5%.

Revenues within KNX’s All Other Segments for the fourth quarter declined 36.4% year over year to $44.7 million, owing to the winding down of KNX’s third-party carrier insurance program at the first quarter of 2024-end.

Liquidity

Knight-Swift exited the fourth quarter with cash and cash equivalents of $218.26 million compared with $166.34 million at the prior-quarter end. Long-term debt (excluding current maturities) was $1.44 billion compared with $1.50 billion at the end of the prior quarter.

KNX’s Guidance

Adjusted earnings for the first quarter of 2025 are still expected to be in the range of 29-33 cents per share. The Zacks Consensus Estimate of 31 cents lies within the guidance.

For second-quarter 2025, adjusted earnings are expected to be in the range of 46-50 cents per share. The Zacks Consensus Estimate stands at 52 cents.

Net interest expense is expected to be down modestly sequentially in the first quarter of 2025 and stable sequentially into the second quarter of 2025. KNX expects net cash capital expenditures for 2025 in the $575 million-$625 million band. The tax rate (on an adjusted basis) is expected to be around 24.5-25.5% for 2025.

KNX’s Zacks Rank & Price Performance

Currently, KNX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KNX’ encouraging price performance is not limited to the post-fourth-quarter earnings release. Over the past six months, shares of KNX have gained 10.6%, outperforming the 3.1% rise of the industry it belongs to.

Six-Month Price Comparison

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Q4 Performances of Other Transportation Companies

Delta Air Lines DAL reported fourth-quarter 2024 earnings (excluding 56 cents from non-recurring items) of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.76. Earnings increased 44.5% on a year-over-year basis due to low fuel costs.

DAL’srevenues of $15.56 billion surpassed the Zacks Consensus Estimate of $14.99 billion and increased 9.4% on a year-over-year basis, driven by strong holiday travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.44 billion, up 5.7% year over year. Passenger revenues, which accounted for 82.4% of total revenues, increased 5% year over year at $12.82 billion.

J.B. Hunt Transport Services (JBHT) reported fourth-quarter 2024 earnings per share of $1.53, which fell short of the Zacks Consensus Estimate of $1.62. However, the bottom line increased 4.1% on a year-over-year basis.  

JBHT’s total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year over year. The decline was mainly due to lower fuel surcharge revenues and yield pressure in its Intermodal segment.

JBHT’s fourth-quarter 2024 operating revenues of $2.78 billion, excluding fuel surcharge revenue, decreased 2% from the year-ago reported quarter. Total operating income for the reported quarter increased 2% year over year to $207 million.

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