Knight Transportation reported its net income in the fourth quarter of 2013 was $20.1 million, improving 13.6 percent year-over-year from $17.7 million, partially fueling an 8.1 percent gain in profit for the full year of 2013.
Stifel Transportation & Logistics Research Group said that Knight’s earnings were ahead of consensus analyst estimates and at the upper end of the company’s recent guidance range. Knight increased its fourth quarter earnings guidance earlier this month after “better than expected” performance in revenue per tractor, non-asset-based business and cost management, according to the company.
Quarterly revenue for the motor carrier, No. 23 on JOC’s list of the Top 50 Trucking Companies, rose 3.1 percent from $242.3 million in 2012 to $249.7 million in 2013.
Kevin Knight, chairman and CEO, said he was “pleased” with the company’s ability to grow revenue and improve its operating margin, which was driven by improved freight demand, as well as several internal initiatives focused on improving production, recruiting and developing driving associates and intensifying cost control efforts.
Revenue per tractor in the fourth quarter rose 3.2 percent year-over-year, as a result of a 3.4 percent improvement in revenue per total mile and a 1.3 percent decrease in length of haul, Knight said. He also noted that miles per tractor were down 0.2 percent, as the company was able to mitigate impacts from the hours of service regulations.
“We expect to continue to make year-over-year improvement in revenue per tractor,” said David A. Jackson, Knight Transportation’s president, in the fourth quarter earnings call, as transcribed by Seeking Alpha.
The asset-based business, including dry van, refrigerated and port services, “significantly” improved operating ratio to 81.6 percent in the fourth quarter of 2013, from 83.8 percent in the fourth quarter of 2012, Knight said. However, the division’s revenue, excluding trucking fuel surcharges, slipped 0.8 percent year-over-year to $164.8 million from $166.0 million.
The non-asset-based division, including brokerage, intermodal and other services, increased revenue 42.6 percent, led by “strong” performance in brokerage, totaling $41.5 million. Conversely, the unit’s operating ratio unfavorably increased to 95.6 percent.
Compared with competitors Swift Transportation and Werner Enterprises, Knight Transportation reported the lowest quarterly profit and revenue, although its year-over-year growth results were better than Werner’s year-over-year profit and revenue changes.
For the full year of 2013, Knight’s profit was $69.3 million, increasing 8.1 percent from $64.1 million in 2012. Annual revenue improved 3.5 percent year-over-year, totaling $969.2 million. The asset-based division’s revenue, excluding trucking fuel surcharges, was $644.7 million, down 1.2 percent, while the non-asset-based unit’s revenue was $147.2 million, jumping 47.5 percent.
Kevin Knight noted in the earnings call that the company “should” be in a better environment in 2014 than in 2013.
“We’re coming out of the fourth quarter and into the seasonally weaker first quarter with significantly more confidence as far as what we should be able to accomplish from a yield perspective,” Knight said. “And hopefully, when we talk again in the second quarter, we’ll feel that strength and momentum continuing.”
Net Income, Revenue in the Fourth Quarter of 2013
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|Source: Company earnings|