Knight-Swift Transportation Announces Updated First and Second Quarter Earnings Guidance

Knight-Swift Transportation Holdings Inc. (NYSE: KNX) ("Knight-Swift", the "Company", or "we") today announced an update to its earnings guidance for the first and second quarters of 2024.

Based on preliminary results, the Company now expects that Adjusted EPS⁽¹⁾ for the first quarter of 2024 will range from $0.11 to $0.12 (which is an update from the previously-announced expectation of $0.37 to $0.41). This range includes a loss of $0.08 per share for the third-party insurance business that ceased operation at the end of the quarter; excluding this insurance loss, the expected Adjusted EPS range would be $0.19 to $0.20.

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. In some cases, we have lost contractual volumes because we were not willing to commit to further concessions on what we view as unsustainable contractual rates. This resulted in more of our capacity being allocated to the spot market, which creates further pressure on revenue per mile and utilization in the near term but positions capacity to react to changes in the market. The softer volume and pricing headwinds also impacted our Logistics volumes and margins, with further volume pressure on Logistics as we diverted loads to the asset division to partially offset the contractual volume losses noted above.

The less-than-truckload (LTL) segment continues to show positive volume and yield trends year-over-year, though the impact of the weather disruption was greater on this business relative to our Truckload segment as our LTL network footprint is not nationwide and is more concentrated in the areas affected by the weather in the first quarter. While the subsequent volume recovery was more pronounced in the LTL market than in truckload, it was not enough to offset the outsized impact to our operating costs, resulting in lower operating income than expected. Volumes normalized into March and April, and we remain focused on improving our margins while expanding our footprint as we operationalize many of the properties we have recently purchased.