Knight Transportation Earnings Preview

Knight Transportation (NYSE: KNX  ) only managed to meet estimates last quarter, but investors hope that it will surpass expectations this quarter. The company will unveil its latest earnings on Wednesday. Knight Transportation, through its subsidiaries, is a short- to medium-haul truckload carrier of general commodities.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on Knight Transportation with 14 of 21 analysts rating it hold. Analysts like Knight Transportation better than competitor Heartland Express overall. Two out of 16 analysts rate Heartland Express a buy compared to five of 21 for Knight Transportation. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $218.8 million in revenue this quarter. That would represent a rise of 16.2% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.21 per share. Estimates range from $0.19 to $0.22.

What our community says:
CAPS All-Stars are solidly behind the stock with 84.8% giving it an outperform rating. The community at large concurs with the All-Stars with 83.3% granting it a rating of outperform. Fools are gung-ho about Knight Transportation, though the message boards have been quiet lately with only 57 posts in the past 30 days. The CAPS rating of five out of five stars for Knight Transportation is far more upbeat than the community assessment.

Management:
Knight Transportation's income has fallen year over year by an average of 2.3% over the past five quarters. The company's gross margin shrank by 6.2 percentage points in the last quarter. Revenue rose 18.7% while cost of sales rose 36.3% to $108.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q3	Q2	Q1	Q4
Gross Margin	52.1%	52.0%	53.4%	57.2%
Operating Margin	13.6%	13.3%	10.2%	18.0%
Net Margin	7.3%	7.2%	5.3%	7.6%

One final thing: If you want to keep tabs on Knight Transportation movements, and for more analysis on the company, make sure you add it to your watchlist.

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Earnings estimates provided by Zacks.