Knight-Swift cuts Q1 EPS view to 8c-10c from 28c-32c, consensus 25c

The revised first quarter earnings guidance reflects the following developments, which affect both GAAP and non-GAAP results for the quarter: $0.08 per share negative impact from claims development in our less-than-truckload (LTL) segment, primarily related to a large unfavorable arbitration award on a 2022 incident; $0.05 per share negative impact from project business in our warehousing business included in our All Other Segments being deferred into the second and third quarters, partly attributable to the weather-related disruption in the first quarter; $0.02 per share negative impact for an adverse decision on VAT reimbursement in Mexico related to prior tax years; An estimated $0.05 – $0.06 per share negative impact due to severe winter weather disruptions in January and sharply rising fuel prices in March. Adam Miller, CEO, “While the winter weather negatively impacted volumes and operating costs more than typical for a first quarter, it also exposed the reduction in truckload capacity to all stakeholders, which is very meaningful for ongoing bid activity. Similarly, the rapid increase in fuel costs was a headwind to earnings in March, but we believe this will add to the existing downward trend in supply in the truckload industry. The truckload market continues to tighten, and the bid environment is rapidly evolving while our leading presence in the one-way market grows increasingly valuable to shippers. All things considered, we are more optimistic about the earnings opportunity for our businesses over the next several quarters than we were three months ago. We expect to build momentum in the coming months as more bids run their course and new pricing and volume awards are realized in the operating results, as we continue our cost and operational initiatives, and as we anticipate more spot and project opportunities than we have seen in recent years.”