Knight Transportation posts flat 2Q profit

user-gravatar Headshot

Knight Transportation on Wednesday, July 22, reported revenue and earnings for the second quarter ended June 30. For the quarter, revenue before fuel surcharge decreased 6.8 percent to $144.3 million from $154.8 million. Primarily due to decreased fuel surcharge revenue, total revenue decreased 21.4 percent to $162.1 million from $206.1 million. Operating income of $20.8 million represented a 0.3 percent increase over $20.7 million. Net income decreased 1.0 percent to $12.6 million from $12.7 million.

Year-to-date, revenue before fuel surcharge decreased 6.3 percent to $277.4 million from $296.1 million for the same period of 2008. Operating income increased 2.0 percent to $40.2 million from $39.4 million. Net income increased 0.8 percent to $24.3 million from $24.1 million.

“Although the challenging freight environment continued in the second quarter, we did experience an increase in seasonal demand as the quarter progressed,” said Kevin P. Knight, chairman and chief executive officer of the Phoenix-based company. “Our multiple-truckload service offerings continue to enable us to grow our market share and increase our loads hauled, which were up 5.5 percent year-over-year. This quarter’s performance is a further demonstration of the flexibility of our decentralized business model and ability to adjust and adapt to market conditions.”

On a consolidated basis, Knight Transportation produced an operating ratio of 85.6 percent in the second quarter compared to 86.6 percent in the same period last year.

“While the flurry of bid activity has subsided, the results from the bids earlier this year implemented in the second quarter have pressured rates,” Knight said. “Revenue per total mile decreased 3.8 percent compared to the same quarter a year ago. We have not yet seen evidence that would suggest strong improvements in demand are on the horizon. However, we have seen evidence that many truckload carriers are barely viable and are plagued with weak balance sheets, aging fleets and dramatically shrinking revenues. We expect the challenging truckload market to yield opportunities to continue to capture market share over time. We believe we are well-positioned to navigate the challenges of the current environment and thrive as the market improves when truckload capacity decreases and/or freight demand modestly increases.

“Our plan during this environment continues to be to provide high levels of localized service through our network of service centers and branches, to ratchet up our already intense focus on controlling costs, and to evaluate strategic opportunities that can create value for our stakeholders without undue risk,” he said.