Why Swift Transportation Co. Stock Crashed Today

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  ) fell 16% after the company reported earnings.

So what: Revenue in the quarter was up 4.5% to $1.08 billion, and net income was down 19% to $40.2 million, or $0.33 per share on an adjusted basis. The earnings figure hit estimates on the spot, but revenue was just slightly below the $1.09 billion analysts expected and future growth may be limited after management sold some trucks in the quarter.  

Now what: Demand is strong in the truckload and CRS markets, but Swift had to deal with idle equipment because the company simply couldn't get enough drivers. That's why equipment was sold instead of sitting idle, which is a concern for long-term growth. Given the slow growth and decline in profits, I don't think today presents much of a buying opportunity and I'd wait for a performance turnaround before jumping into shares.

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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9/2/2015 4:04 PM
SWFT $18.90 Up +0.62 +3.39%
Swift Transportati… CAPS Rating: *****