Swift Earnings to Trail Forecast, Guidance
Swift Transportation Co. said its third-quarter and full-year results will lag third-quarter analyst forecasts and its own profit guidance because of costs from past accidents and weaker freight volumes in the fourth quarter.
The Phoenix-based company, which ranks No. 6 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, said third-quarter earnings on an adjusted basis would be 30 cents per share to 33 cents per share, trailing the 44 cents-per-share average estimate by analysts.
For the full year, earnings on that basis were revised to $1.43 to $1.52, a drop of at least 20 cents. Even at the lower amount, 2015 earnings will exceed last year’s $1.38 per share on an adjusted basis.
Swift outlined several reasons for the weakened outlook.
In the third quarter, costs were 7 cents per share accident and workers’ compensation claims and 2 cents to settle a class action suit.
An additional 5 cents to 6 cents per share in the second were linked to “the additional carrying expense associated with the large volume of new tractors received late in the second quarter due to delivery delays and the catch-up throughout the third quarter that has resulted in a significant backlog of tractors being processed for trade or sale.”
Swift also expects a drop in business next quarter that could shave another 5 cents to 6 cents per share from earnings.
“Although we are not satisfied with these developments, we are encouraged by many of the underlying operating trends we are experiencing in our business model,” President Richard Stocking said in a statement. “The benefits we are seeing with the new equipment and expect to realize over the next several years should far outweigh the short-term costs we are experiencing.”
He also cited positive developments in driver turnover and satisfaction, without being specific. In addition, he said recent safety trends have improved.
“We have a tremendous opportunity regarding the utilization of our fleet,” he added, saying utilization “will be an area of hyper-focus.”
Swift also announced it will repurchase as much as $100 million worth of stock, beginning in late October.
