Knight-Swift Transportation Holdings’ effective tax rate remained elevated in Q2 at 37.2%, according to a securities filing, up from around 25% to 26% in recent years.
Drops in operating income can essentially raise the rate, said Knight-Swift CEO Adam Miller on a Q2 earnings call. To wit, the company’s Q2 operating income nosedived 33.5% to $63.5 million amid a prolonged whiplash in trucking freight demand.
Additionally, in Q1, Knight-Swift’s effective tax rate surpassed 55% when operating income was a mere $20.6 million, a severe plunge from $144.8 million a year earlier, per an earnings report.
The company expects its effective tax rate to remain above 30% in Q3, part of a revised projection of an annual rate of approximately 29% to 30% for 2024.
Its previous 2024 guidance initially put the figure within the same range from recent years.
“I think as we see margins build, operating income improve, which we'd expect for next year, we would believe that tax rate would come back to a more normalized level,” Miller said on the Q2 earnings call.
