PHOENIX--(BUSINESS WIRE)--Knight Transportation, Inc. (NYSE: KNX)(“Knight”), one of North America’s largest and most diversified truckload transportation companies, today provided an update on its guidance for the fourth quarter of 2015.
Based on preliminary results, Knight now expects earnings per diluted share will range from:
- $0.31 to $0.33 for its fourth quarter ended December 31, 2015, compared with its prior estimates of $0.36 to $0.38;
Several factors have negatively impacted the fourth quarter of 2015, which has resulted in expected earnings below original estimates. In 2014 we experienced a 5% increase in revenue per total mile sequentially from third quarter to fourth quarter. This was a result of a freight environment with tight capacity and significant non-contract opportunities. In 2015, as a result of excess capacity entering the market, we are experiencing a more typical sequential improvement in revenue per mile from the third quarter to fourth quarter that would compare closer to 2012 and 2013. Volumes in the fourth quarter remain similar to 2014, however, we have experienced significantly less non-contract opportunities. This has resulted in revenue per total mile trending lower than our originally targeted level, which impacted both our trucking and logistics segments and negatively impacted our earnings per diluted share approximately $0.03 - $0.04 when compared to our previous guidance. During the quarter we increased driver pay in specific areas of the company, which resulted in higher driver pay inflation than originally estimated. The softening used equipment market also resulted in our gain on sale of used equipment trending lower than expected. We expect the impact of both driver pay and gain on sale to be approximately $0.01 - $0.02 per diluted share when compared to our previous guidance. We are beginning to see indications that capacity has peaked and may be beginning to decline. These indications include weak new truck orders and the second consecutive quarter of a softening used equipment market. We also believe the recently published electronic logging devices (ELD) mandate will constrain capacity in coming quarters.
Dave Jackson, President and Chief Executive Officer of Knight stated, “The current freight environment presents some challenges, largely as a result of truckload capacity growth, that we believe is temporary and short term in nature. We believe our model positions us well for the opportunities we expect in coming quarters. We continue to explore growth through acquisition and believe the current environment will yield opportunities.”
Fourth Quarter 2015 Earnings Conference Call
Knight Transportation expects to release its 2015 fourth quarter earnings on Wednesday, January 27th, 2016, after market close. Knight will be holding a live conference call with analysts and investors to discuss the earnings release, the results of operations, and other matters after its earnings press release on Wednesday, January 27th, 2016, at 4:30 pm EST. (Please note that, since the call will begin promptly as scheduled, you will need to join a few minutes prior to that time.) Slides to accompany this call will be posted on the company’s website and will be available to download just prior to the scheduled conference call. To view the presentation, please visit http://investor.knighttrans.com/events, “Fourth Quarter 2015 Conference Call Presentation.”
The public will be able to listen and participate in the conference telephonically by dialing (855) 733-9163. An audio replay of the conference will be posted on the Company’s website for at least seven (7) days after the meeting (www.knighttrans.com/shareholders/audio).
The Company assumes no responsibility to update any information posted on its web site.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally may be identified by their use of terms or phrases such as "expects," "estimates," "anticipates," "projects," "believes," "plans," "intends," "may," "will," "should," "could," "potential," "continue," "future," and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, stockholder reports, Annual Report on Form 10-K, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.