Swift Fourth-Quarter Net Income Rises 24%
Net Income Slips at Covenant
John Sommers II for Transport TopicsSwift Transportation Co. improved fourth-quarter net income by 24% to $72.5 million, or 51 cents per share, helped by operational improvements throughout the company and improved profits at its dedicated freight unit.
Revenue at Swift, based in Phoenix, fell 4.4% to $1.09 billion. Excluding fuel surcharges, revenue rose nearly 4% at the company that ranks No. 6 on the Transport Topics list of the Top 100 for-hire carriers in the United States and Canada. Adjusted earnings per share was 53 cents.
The results “exceeded our previously announced expectations, driven by strong operational performance,” said Swift’s quarterly letter to shareholders, which also cited improved driver retention, fuel efficiency and lower costs for worker’s compensation and accidents.. "We were able to generate year-over-year rate increases [excluding fuel surcharge] in our three largest reportable segments, despite difficult comparison quarters.”
During the quarter, Swift said its adjusted earnings per share would range from 47 cents to 51 cents.
Dedicated operating income, excluding interest and taxes, rose about 45% to $27.9 million, although revenue improved just 2% to $241.2 million.
Operating income slipped at the other units. Truckload, the largest unit, had operating income of $75.2 million, down more than 10% as revenue fell 7% to $557.2 million. Swift Refrigerated’s revenue slipped nearly 10%, and operating income dropped about 25% to $3.54 million. Intermodal operating income fell about 60% to $3.05 million as revenue declined 8% to $100.7 million.
Year-over-year results were helped by lower interest costs and the absence of a $27.2 million one-time cost during the 2014 quarter to extinguish debt.
Meanwhile, Covenant Transportation Group Inc., of Chattanooga, Tennessee, reported net income slipped 2% to $13.2 million, or 73 cents per share. Revenue rose less than 1% to $208.5 million including fuel surcharge collections, and increased 11% excluding them.
Covenant CEO David Parker, whose company ranks No. 46, said, “Net income for the fourth quarter was essentially the same as last year in a materially softer overall freight environment," citing factors such as improved rates that were offset by higher staffing costs and weaker prices for used-truck trade-ins.
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