Knight-Swift Transportation slides after cutting profit guidance


Knight-Swift Transportation Holdings (NYSE:KNX) fell in early trading on Wednesday after the company announced new guidance for Q1 and Q2.
Based on preliminary results, Knight-Swift (KNX) now expects that adjusted EPS for Q1 will fall in the range of $0.11 to $0.12 vs. a prior outlook of $0.37 to $0.41 and $0.30 consensus. The range was noted to include a loss of $0.08 per share for the third-party insurance business that ceased operation at the end of the quarter; excluding the insurance loss, the expected adjusted EPS range would be $0.19 to $0.20.
KNX statement: “The full truckload industry continues to be challenging and oversupplied with capacity. The weather disruption in January had a greater impact than initially estimated, as the subsequent recovery was not sufficient to offset the negative impact to volumes and operating costs for the quarter. The early part of the bid season led to greater than expected pressure on freight rates as some shippers are still trying to push rates down further.”
The company also said that it lost contractual volumes because it was not willing to commit to further concessions on what it views as unsustainable contractual rates. The softer volume and pricing headwinds were also observed to have also impacted logistics volumes and margins. Meanwhile, the less-than-truckload segment was said to continue to show positive volume and yield trends year-over-year, though the impact of the weather disruption was greater on that business relative to the truckload segment.
Looking ahead to Q2, Knight-Swift (KNX) expects that adjusted EPS will range from $0.26 to $0.30 vs. the prior outlook for $0.53 to $0.57 and the consensus mark of $0.49.
Shares of KNX fell 2.99% in premarket action on Wednesday.



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