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|JBHT||J.B. HUNT TRANSPORT SERVICES, INC.||113.07||-1.74||-1.52%|
The transportation and logistics-services provider lowered its fourth-quarter earnings outlook to between 50 cents and 52 cents a share, down from its previous forecast of 62 cents to 65 cents.
“The industry continues to be oversupplied with truckload capacity, which led to more muted seasonal improvement in the freight market from third to fourth quarter” leading to “fewer than expected seasonal high-yield freight opportunities.”
As a result, Knight-Swift was unable to increase freight rates as much as it expected, “leading to reduced revenues and lower-than-expected operating income,” the company said.
Thursday’s warning wasn’t the first from Knight-Swift this year.
Ahead of its third-quarter results, the company lowered its third- and fourth-quarter earnings forecasts due to increased competition that led to “unexpected reductions in volume and revenue per load, and greater-than-expected pressure on freight rates, primarily due to an oversupply of truckload capacity.”
This year has been a difficult one for the trucking industry as companies have failed at nearly triple the rate of 2018. Tariffs and a slowdown in industries like autos and housing have contributed to the challenges.
Earlier this month, Celadon Group, the largest provider of international truckload services in North America, became the 795th trucking company to fail in 2019. As a result, nearly 24,000 trucks have been removed from the country’s roads. Last year, 310 trucking companies filed for bankruptcy, eliminating 2,805 trucks.
Knight Swift has not yet announced a date for its fourth-quarter earnings release but has said the results will be revealed in January 2020.
Ahead of Thursday evening’s change, Wall Street analysts surveyed by Refinitiv were expecting Knight-Swift to earn $107 million, or an adjusted 62 cents a share, on revenue of $1.26 billion.
Knight-Swift still expects 2020 first-quarter earnings of between 42 cents and 46 cents.
Shares were up 42.7 percent this year, outperforming the S&P 500’s 27.9 percent gain.
Fox Business' Brittany De Lea contributed to this report.