Knight-Swift Transportation Holdings Inc., the new parent company formed from the $6 billion merger of Phoenix-based trucking giants Knight Transportation and Swift Transportation, recorded a net income of $447.6 million for the fourth quarter of 2017, its first full quarter of post-merger operation.
The company posted earnings per diluted share of $2.50 per share on revenues of $1.4 billion for the quarter, according to Knight-Swift’s most recent financial statements.
Given that Knight and Swift had been operating as two separate, competing entities until Sept. 8, 2017, year-over-year income and revenue comparisons would not be meaningful, but Knight-Swift noted the fourth quarter EPS figures included an income tax benefit of $364.2 million from recent tax reform legislation enacted in the United States. Passed in December, the Tax Cuts and Jobs Act cuts the effective federal tax rate for U.S. corporations from 35 percent to 21 percent.
For the full year, Knight-Swift reported net earnings of $484.3 million ($4.34 per share) on $2.4 billion in revenues.
“Our results for our first full quarter after the merger were encouraging, reflecting favorable market developments in freight demand as well as our early progress on synergies, sharing best practices between our brands and cost control,” said Dave Jackson, chief executive officer of Knight-Swift. “While the teamwork we are witnessing and the opportunities ahead of us give us confidence, we continue to face perhaps the most difficult driver environment we have seen, and we expect these conditions will persist. Sourcing and retaining drivers remains a top priority across our fleets.
“Our synergy efforts are in full swing, reflecting a high degree of collaboration and dialog across the Knight and Swift platforms,” he added. “We expect to achieve our synergy goals based on our progress to date and the opportunities we have identified across the enterprise. We are leveraging each brand’s strengths and partnering on opportunities for improvement.
“The freight environment continued to strengthen in the fourth quarter and showed more staying power than is typical into late December and January. We believe we have begun experiencing the impact of the Electronic Logging Device (ELD) mandate in December, as seen through increased freight tenders as well as tightness in third party carrier capacity. We continue to focus on improving yield to support driver wages and improved profitability.”
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