Swift Transportation reported its net income in the fourth quarter of 2013 plummeted 17.2 percent year-over-year to $45.3 million, ending the year on a low note after double-digit profit gains in the first half of the year.
Stifel Transportation & Logistics Research Group said that although Swift’s earnings were down, the results were above consensus analyst estimates after the company lowered expectations at the end of December 2013. Despite the gain at the top line, Swift’s results were “more than wholly outstripped” by a 250 basis point deterioration in adjusted operating ratio year-over-year, according to the analyst.
Quarterly revenue for Swift, No. 6 in JOC’s Top 50 Trucking Companies, rose 2.7 percent year-over-year to $1.08 billion, from $1.05 billion in the fourth quarter of 2012.
Revenue for the truckload segment was $585.2 million in the fourth quarter of 2013, down 1.0 percent from $591.1 million in the same period in the previous year. The operational fleet of tractors shrank 1.4 percent because of the movement of 250 tractors from the truckload segment to the dedicated segment. Revenue per loaded mile, excluding fuel surcharge revenue, increased 2.6 percent, but was partially offset by a 0.4 percent decrease in loaded miles per truck per week, as a result of the hours of service regulatory changes.
Revenue for the dedicated segment was $192.5 million in the fourth quarter, up 2.3 percent year-over-year from $188.2 million. The division’s improvement was tempered by startup expenses relating to accounts added late in the third quarter and early in the fourth quarter, Swift executives said in a letter to stockholders.
Revenue from Central Refrigerated, which Swift acquired in August 2013, was $140.9 million, increasing 12.3 percent, driven by additional volume and improved pricing. Intermodal revenue in the fourth quarter inched up 0.9 percent year-over-year from $97.7 million in 2012 to $98.6 million in 2013, as the company handled more loads.
For the full year of 2013, the Phoenix-based motor carrier’s profit was $155.4 million, increasing 10.9 percent from $140.1 million in 2012 and 51.3 percent from $102.7 million in 2011. Annual revenue improved 3.6 percent from 2012 and 9.0 percent from 2011, totaling $4.12 billion.
Yearly revenue for the truckload segment rose 1.3 percent from 2012 to $2.31 billion, and dedicated revenue increased 2.0 percent year-over-year to $738.93 million. Intermodal revenue in 2013 was $533.99 million, up from $484.7 million in 2012, and revenue from Central Refrigerated was $350.1 million, increasing from $333.9 million.
In 2014, the company expects an “improving” freight environment compared with 2013 for its truckload segment, as well as improvement in utilization, 2 percent to 3 percent increases in revenue per loaded mile and a 150 to 200 truck increase in tractor count. Furthermore, Swift said it expects the Central Refrigerated segment to be a “focal point” by targeting a 200 unit increase in truck count and a Central/Swift systems integration on Feb. 1. It also said the company will endeavor to improve utilization in its intermodal segment, and is aiming to increase the division’s volume by 10 percent to 20 percent without adding any additional containers.
Stifel said that it is inclined to credit Swift’s management for what they are setting out to do in the upcoming year, but is “not as optimistic” that they will overcome headwinds in the first half of 2014 and still achieve earnings growth for the full year.