Knight-Swift Transportation Q4 Earnings Call Highlights

21 Jan 2026, 18:42 by Doug Wharley · The Cerbat Gem

Knight-Swift Transportation (NYSE:KNX) executives said fourth-quarter conditions were marked by generally stable truckload demand that failed to deliver the typical broad seasonal lift until late in the period, while capacity constraints and regulatory enforcement actions began to tighten parts of the market. Management also highlighted ongoing cost-reduction efforts, technology investments aimed at efficiency and revenue capture, and continued expansion and maturation of the company’s less-than-truckload (LTL) network.

Fourth-quarter results reflected impairments and softer demand

Chief Financial Officer Andrew Hess noted that GAAP results for the quarter included $52.9 million of non-cash impairment charges, primarily tied to the decision to combine the Abilene truckload brand into the Swift business. Revenue excluding fuel surcharge declined slightly, and operating income fell $51.5 million year over year, which Hess said was largely due to the impairment. On an adjusted basis, operating income declined 5.3% as the truckload and LTL demand environments were lighter than in the fourth quarter of 2024.

Knight-Swift reported a GAAP loss per diluted share of $0.04, while adjusted EPS was $0.31, down from $0.36 a year earlier. The consolidated adjusted operating ratio was 94%, up 30 basis points year over year.

Truckload: lower volumes, stronger pricing late, and Abilene integration

Chief Executive Officer Adam Miller said the truckload market was stable overall but lacked the broad seasonal demand lift until late in the quarter. Seasonal project activity arrived in October but “wound down quickly in early November,” resulting in lower-than-expected volumes. Management said December brought some improvement and a tightening spot market, though it appeared to be driven primarily by reduced available capacity rather than stronger demand.

Hess added that shorter-duration seasonal projects—potentially influenced by freight pulled forward earlier in the year amid trade and tariff disruptions—contributed to weaker November volumes. He also cited blockades at the Mexico border as a headwind to productivity, particularly in the TransMex division.

Within the truckload segment, revenue excluding fuel surcharge declined 2.4% year over year, and adjusted operating income declined $9.2 million (down 10.7%), driven largely by a 3.3% decline in loaded miles. Revenue per loaded mile excluding fuel surcharge and intersegment transactions rose 0.7% year over year and improved 1.4% sequentially.

Hess said the combined truckload adjusted operating ratio was 70 basis points higher year over year. Excluding U.S. Xpress, legacy truckload brands operated at a 91.6% adjusted operating ratio, while U.S. Xpress improved its adjusted operating ratio by 430 basis points year over year to the “mid-90s,” supported by its highest seasonal project participation since the 2023 acquisition.

The company also pointed to weakness in the secondary equipment market, with management citing slowing sales trends and falling average prices. Hess said gains on sale were roughly $4 million below the prior quarter and management’s expectations.

Miller said the company decided during the quarter to combine Abilene operations into Swift to improve efficiency, reduce overhead, and better incorporate those assets and freight flows into a larger network with more freight opportunities. In response to a question, Miller characterized Abilene as a smaller business that had “gotten down to around 300-plus trucks” and was struggling, and said management did not see a similar need to take that approach with other brands.

LTL: revenue growth and cost actions amid moderated demand

Knight-Swift’s LTL segment grew revenue excluding fuel surcharge 7% year over year. Shipments per day increased 2.1%, which Hess said was a lower growth rate than the prior quarter due in part to lapping the DHE acquisition on July 30 and a moderation in demand beginning in early October. Revenue per hundredweight excluding fuel surcharge rose 5% year over year.

Despite the revenue gain, adjusted operating income declined 4.8%, and the adjusted operating ratio worsened by 60 basis points year over year. Miller said the team stepped up cost initiatives in response to the changing environment and managed to keep operating margin “within 60 basis points” of the prior-year level even as shipment growth lagged facility and door-count growth. During the quarter, the company opened one new service center and replaced another with a larger site, bringing door-count growth to 10% year over year.

Management said its expanding network is enabling it to pursue new bid opportunities, including with larger shippers that previously required broader coverage than the company could offer. Executives also discussed a move to a unified LTL brand to present “one voice to the customer,” which they said has already helped sales efforts.

Logistics, intermodal, and guidance for early 2026

In logistics, Senior Vice President of Investor Relations Brad Stewart said fourth-quarter revenue declined 4.8% year over year as volumes fell 1% and revenue per load dropped 4.1% due to mix. Stewart said third-party capacity was more difficult to source, pressuring margins; gross margin was 15.5%, down 230 basis points sequentially and 180 basis points year over year. Stewart also flagged an increase in cargo theft and fraud across the industry and said the company has tightened carrier qualification standards and narrowed the carrier base to which it tenders loads.

Intermodal improved its adjusted operating ratio by 140 basis points year over year to 100.1%, driven by a 2.8% increase in revenue per load and structural cost reduction, including lower empty repositioning, drayage, and chassis costs. Revenue declined 3.4% year over year on a 6% decrease in load count, but rose 1.7% sequentially on a 2.6% increase in load count.

For the “all-other” category—which includes items such as equipment sales and rentals, leasing, warehousing, and maintenance—revenue increased 17.7% and the operating loss improved $5.9 million year over year, driven primarily by growth in warehousing and leasing.

Looking ahead, management guided to first-quarter 2026 adjusted EPS of $0.28 to $0.32. Stewart said the outlook assumes stable current conditions, seasonal slowing in truckload, and a seasonal recovery in LTL. The company also expects a rebound in the all-other category following its seasonal fourth-quarter slowdown, and reduced its expected gain-on-sale range due to secondary equipment market trends.

During Q&A, Miller said early January network balance was “better than typical seasonality,” which he attributed more to capacity pressure than demand. He also described early truckload bid-season discussions as more constructive, including conversations starting with positive rate expectations and some customers seeking to shift volume “from brokers to assets.” Management emphasized that cost initiatives remain a key lever, but said a return to “normalized” margins will also require market-driven pricing improvement.

About Knight-Swift Transportation (NYSE:KNX)

Knight-Swift Transportation Holdings Inc (NYSE: KNX) is one of North America’s largest asset-based truckload carriers, offering a wide range of transportation and logistics services. The company was formed in 2017 through the merger of Knight Transportation and Swift Transportation, each with decades of experience in long-haul dry van and refrigerated freight. Since the merger, Knight-Swift has pursued a growth strategy that includes fleet expansions, targeted acquisitions, and investments in technology to enhance service reliability and network efficiency.