Knight-Swift Q3 EPS Beats by 7 Cents as Truckload Recovery Gains Traction

Knight-Swift Transportation (NYSE: KNX) reported third-quarter adjusted earnings of 83 cents per share after the market closed Wednesday — 51 cents higher than a year ago and 7 cents above the consensus estimate. Revenue of $2.2 billion rose 14% year over year, or 8% excluding fuel surcharges, edging past analyst expectations of $2.17 billion. Shares of KNX climbed 4.4% in after-hours trading.

The result also cleared the top end of management's own guidance range of 71 to 77 cents per share, a range the company had framed last quarter as part of its recovery roadmap. Management will discuss the results on a call at 5:30 p.m. EDT Wednesday.

What did the CEO say?

CEO Adam Miller pointed to building momentum across the company's businesses. "We expect momentum across our businesses to keep building as rates continue to be reset, as we maintain our cost and operational initiatives, and as we anticipate more seasonal spot and project opportunities than we have seen in recent years," Miller said in a news release.

That language matters for shippers and carriers alike. A seasonal uptick in spot and project freight, layered on top of contract rate resets, would mark a departure from the prolonged freight downturn that has suppressed pricing since 2022.

How did the truckload unit perform?

The truckload segment drove the beat. Revenue excluding fuel rose 6.5% year over year, powered by an 11% increase in revenue per tractor that only a 4% decline in average tractors in service partially offset. Loaded miles per tractor gained 1%, the eighth consecutive quarterly increase, while deadhead fell 170 basis points year over year to 12.1%.

Pricing improved broadly. Revenue per loaded mile excluding fuel climbed 10% year over year, with the over-the-road service posting a mid-teens percentage increase.

The unit's adjusted operating ratio came in at 89.2% — 700 basis points better than a year ago and in line with the midpoint of management's guidance. The gap between acquired and legacy operations remained visible: U.S. Xpress, acquired in 2023, ran at a low-90s adjusted OR, while Knight-Swift's legacy brands operated at 88%.

What about the LTL segment?

Less-than-truckload told a flatter story. Revenue excluding fuel rose less than 1% year over year. Tonnage increased 3%, but revenue per hundredweight excluding fuel dipped 1%, as a 5% increase in weight per shipment and a 6% increase in length of haul mostly offset each other's impact on yield. Revenue per shipment excluding fuel rose 4%, and contractual renewals were up by a mid-single-digit percentage.

The LTL unit posted a 91.4% adjusted operating ratio, 80 basis points worse than the year-ago quarter — a reminder that the integration and margin work in that network is far from finished.

How much of the EPS beat was one-off?

Not all of the quarter's strength came from operations. Knight-Swift itemized several below-the-line benefits:

• A lower tax rate added 5 cents per share
• A $22 million reduction in net interest expense added 10 cents per share
• A slight increase in gains on equipment sales added 1 cent per share

Against those, the other income line fell $3.5 million year over year, a 2-cent headwind per share. Strip the tailwinds out and the operational beat narrows considerably, though the truckload OR improvement stands on its own.

What does Knight-Swift expect for Q4?

The company guided fourth-quarter adjusted EPS to 78 to 84 cents, a range that bracketed the 82-cent consensus at the time of the print. The midpoint implies continued sequential progress rather than a step-change.

Knight-Swift is the nation's largest asset-based truckload carrier, and its results serve as a bellwether for the broader market. Wednesday's numbers, particularly the eighth straight quarter of productivity gains and double-digit revenue-per-mile growth, support the view that the truckload market has moved past a cyclical downturn and into a structural recovery — a trajectory management expects to extend as seasonal freight demand builds into year-end.