Why Shares of Swift Transportation Co. Went Downhill

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Swift Transportation Co.  (NYSE: SWFT  ) were moving backwards today, falling as much as 14% after reporting first-quarter earnings last night.

So what: The trucking company said that revenue in the quarter increased 2.7% to $1.01 billion, slightly below estimates at $1.02 billion, while adjusted profits sunk from $0.24 per share to $0.12 per share, though that was even with expectations. Like many other business, Swift cited severe winter weather as impacting the bottom line, lowering operating income by $17 million-$18 million. Outside of the weather, there were some positive signs as revenue excluding fuel surchages increased 4.1%, and individual operating segments saw a variety of improvements. 

Now what: Despite problems with weather and insurance claims in the first quarter, management was optimistic about current trends including increasing demand, lower accident, and better fuel efficiency. Swift said it expects earnings of $0.30-$0.35 per share for the current quarter and $1.31-$1.41 for the full year. Analysts had projected a profit of $0.37 for the current quarter and $1.33 for the full year. The downside guidance for the current quarter may also explain why shares are falling today.

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