Knight Transportation has dropped its earnings-per-share guidance due to lower-than-expected earnings during the third quarter.
The carrier saw lower miles-per-tractor during the period when compared with the same period in 2012 despite a 3.6 percent fleet reduction. Revenue per mile was also below expectations, and the carrier had to pay out increased driver training, payroll and recruiting costs.
On top of it all, the new hours-of-service rules and soft freight demand worked to drive down earnings. The company will release its third-quarter results on Oct. 23.
Despite the current state of Knight’s business, Kevin Knight, the carrier’s chairman and chief executive officer, expressed hope for the future.
''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,” he stated. “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.''
Toward the end of the quarter, Knight started to lay the groundwork for what some in the industry are seeing as a potential hostile takeover of USA Truck. Knight had repeatedly offered to buy the company only to be rebuffed by its ownership, so it began the process of reaching out to shareholders in order to secure a majority stake in the carrier.
Industry analysts seem to be taking all the news in stride and are still confident in Knight’s ability to perform.
“As the industry-leading operator, we believe Knight will continue to manage well through the sluggish freight environment and should eventually benefit from better freight demand and pricing when the overall economy improves,” Nat Brochmann of William Blair wrote in an investor note.
Cowen and Co.’s Jason Seidl pointed out that two other truckload companies, Swift and Werner ,have both recently lowered their guidance and that this underscores a “near-term cautious view of the industry.”