Shares of Knight-Swift Transportation dropped 3.5% after-hours due to a Q3 earnings miss and a light Q4 outlook. The company cited a lack of seasonal demand lift heading into the holidays but noted positive project conversations. Early impacts on the driver pool were seen, with low-single-digit rate increases and less customer churn.

Knight-Swift reported Q3 adjusted EPS of 32 cents, below expectations, with $58 million in unusual items. The company excluded trade name impairments and other charges from adjusted EPS. Fourth-quarter guidance is 34 to 40 cents, lower than the consensus estimate.

The TL unit saw a revenue decline and an adjusted operating ratio of 96.2% in Q3. The company expects a sequential margin improvement of 250 to 350 bps in Q4. The Outbound Tender Reject Index indicates capacity constraints, while the National Truckload Index shows rates ahead of last year.

Knight-Swift’s LTL brands will operate under AAA Cooper Transportation starting Jan. 1. The company acquired ACT, MME, and DHE to create a national network, covering 70% of the US. LTL revenue rose 22% y/y in Q3, with a 6% increase in yield. The logistics unit saw a revenue decline but improved OR.

The intermodal segment reported its first adjusted operating profit in 10 quarters, with a 99.8% adjusted OR. Load count is expected to increase sequentially in Q4. Knight-Swift remains focused on cost-cutting and attracting appropriately-priced freight to its network.

Read more at Yahoo Finance: Knight-Swift logs another tough quarter on road to recovery