=Knight-Swift (KNX) reported earnings on Thur 26 July 2018 (b/o)

Knight-Swift misses by $0.01, revs in-line; guides Q3 in-line and Q4 EPS slightly below consensus 

• Reports Q2 (Jun) earnings of $0.56 per share, excluding non-recurring items, $0.01 worse thanthe Capital IQ Consensus of $0.57; revenues $1.33 bln vs the $1.33 bln Capital IQ Consensus.
• Co issues in-line guidancefor Q3, sees EPS of $0.56-0.60, excluding non-recurring items, vs. $0.59 Capital IQ Consensus Estimate and downside guidance for Q4 (Dec), sees EPS of $0.68-0.72, excluding items, vs. $0.73 Capital IQ Consensus Estimate.
• "Swift Intermodal continues to show sequential and year-over-year improvements since the merger between Knight and Swift. Additionally, Knight Logistics continues to grow load count as well as operating income. We have a team working on identified opportunities to improve profitability within our Swift Refrigerated segment, and we expect to make progress in the second half of 2018."

Swift Transportation (SWFT) and Knight (KNX) announce all stock merger

Swift Transportation and Knight (KNX) announce all stock merger; Swift share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split, implying $22.07 for Swift; both cos guides Q1 and Q2 EPS below consensus (SWFT) :

Knight Transportation (KNX) and Swift Transportation (SWFT) announced that their boards of directors have unanimously approved a merger of Knight and Swift in an all-stock transaction that will create the industry's largest full truckload company. The combined company will be named Knight-Swift Transportation and will trade under the ticker "KNX."

• This transaction combines under common ownership two long-standing industry leaders creating North America's premier truckload transportation company with $5 billion in annual revenue and a "Top 5" truckload presence in dry van, refrigerated, dedicated, cross-border Mexico and Canada, and a significant presence in brokerage and intermodal. The company will remain headquartered in Phoenix, Arizona operating with ~23,000 tractors, 77,000 trailers, and 28,000 employees.

Each Swift share will convert into 0.72 shares of Knight-Swift by means of a reverse stock split. Each share of Knight will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift is $22.07. Upon closing of the transaction, Swift stockholders will own ~54 percent and Knight stockholders will own ~46 percent of the combined company. Based on Knight's closing share price on April 7, 2017, the number of combined company shares expected to be outstanding after closing and the combined net debt of Swift and Knight as of December 31, 2016, the combined company would have an implied enterprise value of ~$6 billion. Knight is expected to be the accounting acquirer, and the transaction is expected to be accretive to adjusted earnings per share with expected pre-tax synergies of ~$15 million in the second half of 2017, $100 million in 2018, and $150 million in 2019.