Why Knight-Swift Transportation Shares Are Sliding Today

Knight-Swift Transportation Holdings Inc KNX shares are trading lower after it reported worse-than-expected Q2 2023 earnings results and cut 2023 guidance.

Revenues of $1.55 billion, down 20.8% Y/Y, missed the consensus of $1.60 billion.

Revenue in the Truckload segment fell 15.5% Y/Y to $829.4 million, LTL segment rose 2.0% Y/Y to $228.6 million, Logistics fell 52.4% Y/Y to $117.8 million, and Intermodal declined 21.5% Y/Y to $104.3 million. 

Adjusted operating income was down 66.3% Y/Y to $114.7 million.

Adjusted EPS of $0.49 missed the street estimates of $0.57.

Year-to-date, operating cash flow stood at $722.2 million. 

As of June 30, 2023, KNX had $1.1 billion of unrestricted cash.

2023 Outlook: The company lowered the outlook for 2023 adjusted EPS to $2.10-$2.30 (from $3.35-$3.55) vs consensus of $2.76.  

KNX now expects net cash capital expenditures of $700 million – $750 million (including the U.S. Xpress acquisition) vs $640 million to $690 million guided earlier. 

Related: Knight-Swift Closes U.S. Xpress Buyout, Projects Lower-Than-Expected Q2 Results

David Jackson, CEO, said, "We believe we are in the late innings of inventory de-stocking and expect to see a normalization of imports and seasonality in coming quarters. Industry margins have been squeezed to unprecedented levels as rising operating costs have not relented as has been typical in previous cycles when truckload demand weakens. If past cycles are any indication, the longer the time spent at the bottom, the more pronounced the rebound can be. As such, while we diligently control costs and mitigate risk in the current environment, we are positioning our business for the eventual recovery."

Price Action: KNX shares are down by 3.31% at $54.00 premarket on the last check Friday.