Why Swift Transportation Co. Stock Crashed Today

Is this meaningful, or just another movement?

Travis Hoium
Travis Hoium
Jul 25, 2014 at 2:08PM

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.