Question · Q3 2025
Kenneth Scott Hoexter (BofA Securities) sought clarification on Knight-Swift's adjusted EPS calculation for Q3, specifically why certain charges were not excluded, and requested more detail on the Q4 seasonal demand outlook, noting mixed messaging regarding peak projects versus broad-based demand. He also questioned the LTL operating ratio balance given prior year startup costs.
Answer
CEO Adam Miller explained that the $0.10 impact from third-party insurance and US Xpress settlements was not adjusted out to maintain historical reporting patterns, unlike impairments. Regarding Q4 demand, Miller clarified that while some peak projects are awarded and executing, broad-based demand has not yet shown typical seasonal growth, and potential unawarded projects are not factored into current guidance. For LTL, Miller attributed the conservative Q4 OR outlook to early quarter softness and the high fixed-cost nature of the business, noting that while DHE had startup costs last year, current softness and channel checks suggest a cautious approach.