Knight-Swift Transportation Holdings lowered its operating performance outlook Wednesday, projecting consolidated operating margins will decrease 11 to 12 percentage points from what it expected for the quarter YoY.
“This decline in operating performance is largely driven by the full truckload market, where persistently soft demand has caused volumes and pricing to be under greater pressure than originally anticipated, while costs remain stable on a sequential basis,” the company said.
Operating income for Knight-Swift’s truckload segment dropped from $205.1 million in Q1 2022 to $115.9 million in Q1 2023. Other carriers have also noted hardships amid a troubled market, with operating income nosediving for P.A.M. Transportation Services from $31.3 million to $8.5 million during that same time.
“Freight demand in the first quarter was below expectations and more persistently soft than typical seasonal patterns,” Knight-Swift CFO and Treasurer Adam Miller said on an earnings call in April.
“Weak demand, pressured volumes and pricing while ongoing inflation was a further headwind on operating income,” said Miller, who also serves as president of Swift Transportation.
The updated outlook comes after the carrier completed its acquisition of U.S. Xpress Enterprises on July 1 for over $800 million. Knight-Swift plans to incorporate these changes to its finances with its July 20 earnings release.
