Truckload transportation and logistics services provider Knight Transportation Inc. on Wednesday reported a 55.1% increase in its first quarter profit.
Net income increased to $29.6 million from $19.1 million in the first quarter of 2014 while earnings per diluted share moved higher to 36 cents from 23 cents.
Total revenue increased 16.5% to $290.3 million from $249.2 million,
“During the quarter, truckload capacity remained constrained while demand continued to be solid. Both our trucking and logistics segments experienced profitable growth, as these businesses continue to complement one another and create value for our customers,” said Dave Jackson, president and CEO of the Arizona-based company. “We expect growth to continue in both the trucking and logistics segments of our business as we expand our capacity and pursue acquisition opportunities.''
In the first quarter, the trucking segment operating ratio improved to 79.2% from 82% a year earlier. The trucking segment experienced revenue growth, excluding trucking fuel surcharge, of 25%, while improving operating income by 44.7%.
Revenue per tractor, excluding fuel surcharge, increased 4.7%, year over year, due to an 8.5% improvement in revenue per loaded mile, offset by a 1.5% decrease in average miles per tractor, while length of haul remained essentially flat, according to Knight.
“The West Coast port slowdown negatively impacted our volumes in the West, with our port and rail services business experiencing the most significant impact,” Knight said in a release. “We reacted in our port and rail services business by improving contract rates and accessorial agreements to offset the reduction in miles. Lower fuel prices resulted in a benefit to our cost per mile that was partially offset by increased salaries and wages, increased recruiting and hiring costs, and rising equipment prices.”
In the first quarter, the logistics segment operating ratio improved to 92.4% from 95.1% for the same quarter last year. “We continued to grow profitably by increasing revenue 25.7% while increasing operating income by 95.3%. Our brokerage business, which is the largest component of our logistics segment, increased revenue 46.4% with a 79.1% improvement in operating income, when compared to the same quarter last year,” Knight said. “Revenue in our intermodal business declined year over year 8.4%, however, we achieved an 88.5% operating ratio and have now been profitable for the fourth consecutive quarter.”
Despite a favorable freight environment, Knight said the current shortage of qualified driving associates has been a headwind for adding additional capacity and will likely be a deterrent to industry-wide capacity additions.
During the first quarter Knight’s average tractor count, including independent contractors, increased 780 tractors, 19.6%, when compared to the same quarter last year. This increase came from approximately 550 tractors through Knight’s acquisition of Barr-Nunn Transportation in October 2014, according to the company.