Knight Transportation has announced that it expects its earnings per diluted share for the third quarter to be in the range of 18 cents to 20 cents, down from its earlier projection of 22 cents to 24 cents.
Knight Transportation, No. 23 on JOC’s ranking of the Top 50 Trucking Companies, also lowered its expectations for the fourth quarter to be in the range of 20 cents to 23 cents, a drop from its prior estimate of 22 cents to 25 cents.
The motor carrier said the third quarter was negatively impacted by lower miles per tractor year-over-year and unexpectedly low revenue per mile, resulting from soft freight demand, as well as increased driver recruiting, training and payroll costs, as a result of the new hours-of-service regulations.
“'In recent weeks, we have seen improvement in driver recruiting, which reduced the number of unseated tractors, and have begun to see pickup in some previously soft freight markets,” said Kevin Knight, chairman and CEO of Knight, in a written statement. “We believe that our industry-leading operating efficiency positions Knight for continued success, and enables us to capitalize on growth opportunities during these challenging times in our industry.”
Knight is not the only trucking company that has reduced its guidance for the quarter. Werner Enterprises, No. 10 on JOC’s list of the Top 50 Trucking Companies, lowered expectations for its earnings to be in the range of 27 cents to 30 cents in the third quarter. Swift Transportation also lowered its guidance, Stifel Transportation & Logistics Research Group analyst John G. Larkin said.
Although July is typically seasonally weak, Knight’s soft freight demand appeared to continue into August, according to the financial services firm. Stifel Nicolaus also explained that despite Kevin Knight’s mention of recent improvement in recruiting and unseated tractor levels over the last few weeks, the net negative overall for the third quarter is one of the main reasons for Knight Transportation’s attempted acquisition of USA Truck.
Knight Transportation reported its net income in the second quarter was down 1.8 percent year-over-year, although revenue was up 3.6 percent.