Knight Transportation, Inc. (Knight) is scheduled to report Q4-2010 results on Wednesday, January 26, 2011. For December 2009, and March 2010 quarters, the company's reported EPS met analysts' consensus. For June 2010 quarter the company exceeded analysts' consensus, while for the September 2010 quarter it fell short of the consensus.
Knight is a truckload transportation services provider. It transports general commodities for customers throughout the United States focusing its operations on a short-to-medium length of haul. The types of freight it transports include consumer staples, retail, paper products, packaging/plastics, manufacturing and import/export commodities. As of December 31, 2009, it operated 35 asset-based service centers (consisting of 29 dry van/drayage service centers and six temperature-controlled service centers) and 12 non-asset-based brokerage branches. The company has two segments: an asset-based segment and a non-asset-based segment. Its asset-based segment includes dry van, temperature-controlled and drayage operations, which are geographically diversified and provide truckload carrier services of general commodities to a similar class of customers. Its non-asset-based segment consists of brokerage operations. KNX's primary customers include retailers and manufacturers. Its 25, 10 and 5 largest customers accounted for 40%, 25% and 16% of revenue in 2009, respectively. Yet, KNX has one of the least concentrated customer bases of the publicly traded short- to medium-haul dry van truckload carriers.
The company reported a net income of $16.65 million or $0.20 per diluted share for the third quarter ended September 30, 2010, compared to $13.11 million or $0.16 per diluted share for the third quarter ended September 30, 2009. For the third quarter of 2010, total revenue was $191.3 million compared to $173.13 million for the same quarter of 2009. Net income for the first nine months ended September 30, 2010 was $44.83 million, or $0.53 per diluted share compared to $37.42 million or $0.45 per diluted share for the same period ended September 30, 2009. For the first nine-month period of 2010, total revenue was $542.4 million compared to $483.93 million for the corresponding period of 2009.
Analysts' EPS estimates for the fourth quarter of 2010 range from a low of $0.19 to a high of $0.22, compared to a consensus estimate of $0.2 or year ago EPS of $0.16. Analysts' revenue estimates for the fourth quarter of 2010 range from a low of $150.83 million to a high of $200 million compared with a consensus estimate at $187.04 million or reported revenue of $167.09 million in the same quarter a year ago. For the fourth quarter, the consensus EPS forecast has remained the same over the past week as well as the past month at $0.200. Of the 2 analysts making quarterly forecasts, none raised and both lowered their forecast.
In November 2010, the company declared a special cash dividend of $0.75 per share of common stock.
In the last one year, the stock has been trading in the range of $17.5 and $22.38. In the last one year, the closing share price has lost $0.9 or 4.42%. I forecast 2011 earnings per share at $0.9, and see 2012's at $1.1. Based on these estimates, I set a target price of $22.7.
