Knight-Swift reports Q1 adjusted EPS 73c, consensus 81c

Reports Q1 revenue $1.64B, consensus $1.61B. David Jackson, CEO of Knight-Swift, commented, "The unusually soft demand experienced in the fourth quarter of 2022 continued through the first quarter of 2023, as demand proved worse than expected. This weakness in demand has continued thus far in April. The general lack of import activity, especially on the West Coast, negatively impacted freight volumes and led to a more competitive bid season. The absence of the typical seasonal uplift in March saw truckload spot rates drift lower to levels that we believe are below cash operating costs for a large portion of carriers, especially smaller and less-well-capitalized operators. With rates under significant pressure, our intense focus on cost control and our dedicated business’ improvement in revenue, rates, and operating ratio served to help keep our Truckload segment’s Adjusted Operating Ratio in the mid-80’s for the quarter. Our Less-thanTruckload business performed well, essentially holding revenue, operating income, and operating ratio flat as yield improvements and cost discipline offset the softer volume environment. We anticipate the general weakness in shipping demand will persist through the spring while ongoing rate pressure and cost inflation will continue to drive capacity from the market. We believe this rationalization of capacity, combined with the progress being made by shippers in their efforts to work down inventory levels, will lead to improved business conditions for carriers in the back half of 2023. While the current freight environment continues to be challenging, we are already positioning ourselves to prepare for the impending freight recovery, including the announced transaction to acquire U.S. Xpress later this summer, for which we are uniquely qualified and experienced to meaningfully improve results through the next phase of the cycle."