Mixed bag for carrier earnings

JB Hunt.jpg

Carriers to report 4th quarter earnings are indicating that the end of 2016 was weaker than anticipated, although a positive outlook for 2017 remains.

Knight Transportation Inc. (NYSE: KNX) posted only a small drop of 0.6% in the 4th quarter year-over-year. For 2016, the carrier posted revenue of $289.1 million, bettering Wall Street expectations of $286.2 million. For the year, profit was $93.9 million on revenue of $1.12 billion.

Dave Jackson, Knight president & CEO, said the freight environment continues to show signs of improvement as 2017 begins.

“We expect capacity to continue to tighten as a result of low new truck orders, a weak demand for used equipment and additional regulatory burdens expected to phase in over the coming quarters,” Adam Miller, CFO, told analysts on the company’s earnings call.

The trucking environment in the fourth quarter improved sequentially compared with the third quarter of 2016.
— David R. Parker, chairman and CEO, Covenant Transportation Group

Covenant Transportation Group (NYSE: CVTI) posted a 4th quarter profit of $6 million, it said, on revenue of $191 million. That was down 8.2% from 2015. The Chattanooga, TN-based companysaid for the year, profit was $16.8 million on $670.7 million in revenues.

“The trucking environment in the fourth quarter improved sequentially compared with the third quarter of 2016,” said David R. Parker, chairman and CEO. “The peak freight season was more condensed than in 2015 as rapidly growing e-commerce sales continue to compress the holiday inventory stocking and delivery season. This year, the pace of freight and need for our value-added expedited services was concentrated largely between the week of Thanksgiving through Christmas Day, which was shorter than the past two peak seasons.”

Patriot Transportation, parent company of liquid and dry bulk hauler Florida Rock & Tank Lines, reported net income of $912,000 in its fiscal 2017 1st quarter vs. $1.4 million. The prior year included a little more than $1 million of net income from the settlement of a claim with BP in connection with the 2010 Deepwater Horizon event in the Gulf of Mexico, it said.

J.B. Hunt (NYSE: JBHT), in its earnings report earlier in the week, reported positive growth. The company said 4th quarter earnings increased to $117.6 million, up from $116.7 million. Total operating revenue was $1.72 billion, up from $1.62 billion in 2015. For all of 2016, net income totaled $432.1 million compared to $427.2 million a year earlier, as total revenue also moved higher to $6.6 billion from $6.2 billion.

YRC Worldwide (NYSE: YRCW) has not officially reported its earnings yet, but presented a forecast. The company anticipates reporting 4th quarter consolidated operating revenue of approximately $1.143 billion to $1.153 billion and consolidated operating income of approximately $10 million to $20 million. The company also expects to report adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $53 million to $63 million. For all of 2016, YRC Worldwide expects consolidated operating revenue of approximately $4.692 billion to $4.702 billion and consolidated operating income of approximately $119 million to $129 million.

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Brian Straight

Brian Straight has covered the U.S. trucking and transportation community for more than 10 years, winning numerous regional and national editorial awards, including a Jesse. H. Neal Award. Prior to working on FreightWaves, Brian spent 10 years at industry trade magazine Fleet Owner, and prior to that managed daily newspaper editorial operations.