Piper Jaffray Retains Neutral Rating On KNX

Knight Transportation, Inc. (NYSE: KNX) reported yesterday before the market 4Q10 continuing EPS of $0.19 (+22.6% y-o-y), “below Consensus $0.20 and our $0.21 estimates,” Piper Jaffray reports.

“Downside to our estimates resulted from (1) greater purchased transportation costs (faster Brokerage growth) and (2) higher fuel and other op expenses,” Piper Jaffray writes.

“Brokerage growing faster than core TL will continue to put pressure on op margins y-o-y. While KNX added owner operators, core company owned tractors declined sequentially with a late 4Q10 reduction of 70 units due to softer demand. Lack of tractor additions likely holds back rev upside potential. Further tractor additions, when they do occur, are a near term utilization / profitability headwind.”

Piper Jaffray is retaining its Neutral rating on shares of Knight Transportation, which currently trades at $19.11.