The truckload transportation and logistics services provider reported a net income of $24.7 million in the second quarter of 2016 and $47.2 million in the first half of 2016, year-over-year decreases of 10.7 percent and 17.4 percent, respectively.
Knight Transportation, Inc. saw its earnings and revenues tumble in the second quarter and first half of 2016 compared with the same 2015 periods, according to the company’s most recent financial statements.
The truckload transportation and logistics services provider reported its net income dropped 10.7 percent to $24.7 million for the second quarter as revenues slipped 8.5 percent to $276 million compared with the previous year. Diluted earnings per share (EPS) stood at $0.31 per share compared with $0.33 per share in second quarter 2016.
The company noted its second quarter 2015 results included $7.2 million in expenses ($4.4 million after taxes) related to two class action lawsuits.
For the first six months of 2016, Knight posted company earnings of $47.2 million on revenues of $548.4 million, year-over-year decreases of 17.4 percent and 7.4 percent, respectively. The company reported first half diluted EPS of $0.58 per share compared with $0.69 per share in the same 2015 period.
The company’s trucking segment saw operating income slide 7 percent to $35.3 million for the quarter and 11.1 percent to $71.2 in the first half of 2016. Excluding fuel surcharges, revenues for the segment stood at $203.9 million and $403.3 million for the second quarter and first half, respectively, year-over-year declines of 4 percent and 2.7 percent.
The company attributed the negative earnings growth in its trucking division primarily to a 1.5 percent decrease in revenue per tractor, which was caused by a 2.4 percent drop in average revenue per loaded mile, a 1.7 percent increase in average miles per tractor, and a 70 basis point increase in non-paid empty mile percentage.
Operating income in Knight’s logistics segment, which includes consists of brokerage, intermodal and other logistics services, plummeted 23.9 percent to $2.8 million for the quarter and 28.5 percent to $5.6 million for the first half of 2016. Logistics revenues fell 11.2 percent to $49.93 million and 6.4 percent to $104.1 million, respectively, compared with the same 2015 periods.
Knight attributed the decline in second quarter revenues primarily to the company exiting its agriculture sourcing business in the first quarter of 2016.
“The freight environment in the second quarter of 2016 was less attractive than the same quarter a year ago,” Knight Transportation President and CEO Dave Jackson said of the results. “We attribute the change to excess trucking capacity in the markets we serve. Although a surplus of trucking capacity remains currently, significantly declining new truck orders, increased bankruptcies, reductions in the driver workforce, low returns on invested capital, and additional regulatory burdens expected to phase in over the coming quarters has and will continue to reduce available capacity.
“We believe this will begin to lead to an improvement in the supply/demand relationship in the coming quarters. During the second quarter, the more competitive freight environment and fewer non-contract opportunities continued to pressure our overall revenue per loaded mile,” he added.
“We continue to focus on improving the productivity of our assets in our trucking segment and expanding load volumes and margins in our logistics segment,” said Jackson. “During the second quarter, when compared to the same quarter last year, we improved our miles per tractor 1.7 percent, grew our brokerage load volumes 28.4 percent, and expanded our brokerage gross margin by 110 basis points.”
Knight Transportation Q2, first half earnings fall due to excess industry capacity
