Swift Transportation (NASDAQ:SWFT) hit a figurative pothole today with a decidedly grim outlook for the remainder of the first quarter ending March 31. The company announced that earnings will likely fall significantly short of earlier projections of $0.19 per share. Short-term weakness was attributed to several underlying causes, including lack of available drivers, rising fuel costs, and the ever-popular excuse: adverse weather conditions. Investors sold quickly on the news, sending shares 14% lower in afternoon trading.

Swift is among the nation's largest transportation service companies, operating 18,000 tractors and 50,000 trailers within a network of 35 terminals. It provides primarily short-to-medium-haul trucking services, transporting a diverse range of cargo -- such as building materials, paper products, non-perishable food, tires, and retail merchandise. Net income from fiscal year 2003 approached $80 million on net revenues of $2.4 billion, much of this coming from Wal-Mart (NYSE:WMT), Swift's largest customer.

Today's announcement further disappointed shareholders, already discouraged by the stock's lack of direction in recent years. As with many companies, compelling cases can be made both for and against Swift, as evidenced by two upgrades and two downgrades within a four-day span in January. Earnings have grown consistently from a low of $0.32 per share in 2001 to a projected high of $1.28 per share this year, reflecting broader economic expansion -- as manufacturing and consumption rise, someone must deliver goods to their intended destinations.

The company also carries little debt, and traditional valuation metrics indicate a modestly undervalued business. As all good Fools are aware, however, many stocks sell at bargain prices for a reason.

Recently enacted legislation limiting a driver's time behind the wheel will slow Swift's productivity and, in a textbook example of supply and demand, a dearth of qualified drivers is lifting wages. Both are squeezing razor-thin margins of 3%, already well under the industry average of 8.6%. Rising fuel costs impact more than just the airline industry, and are also a concern. Finally, competition abounds in every direction -- land, sea, and air. Traditional rivals include JB Hunt (NASDAQ:JBHT) and Knight Transportation (NASDAQ:KNGT), as well as railway companies such as Union Pacific (NYSE:UNP).

Defensive investors searching for a relatively stable firm in a mature industry may want to take a closer look at Swift. For the rest of us, given recent developments, the stock seems to hold little appeal.

Fool contributor Nathan Slaughter has an uncanny ability to get stuck behind 18-wheelers, and owns none of the shares listed. He welcomes your email.