Intermodal growth and higher truckload rates helped Swift Transportation boost second quarter net profit 72 percent from a year ago to $33.7 million.
The nation’s largest truckload carrier increased total revenue 2.6 percent in the quarter to $872.6 million. The results exceeded Wall Street’s expectations.
The company built on its first quarter performance, when Swift reported a $6.2 million net profit on $826.9 million in revenue.
Increases in fleet productivity helped Swift keep net trucking revenue flat year-over-year at $602 million, despite a 3.7 percent cut in its number of trucks.
“We were able to generate similar revenues by improving both our revenue per loaded mile excluding fuel surcharges, as well as our loaded utilization,” the carrier said.
“Freight volumes were ‘good, not great’ throughout the second quarter, and were relatively consistent from month-to-month,” the company said in a letter to shareholders.
Declining fuel prices played a role in the earnings gain and the reduction of the company’s adjusted operation ratio to 87 percent, research firm Stifel Nicolaus said.
“Improved fuel efficiency, a reduction in miles driven, and steadily declining prices served to reduce net fuel expenses by nearly $15 million,” the firm told investors.
The $3.3 billion truckload giant turned to the rails for growth, increasing intermodal revenue 50.7 percent year-over-year, excluding drayage and fuel surcharges.
Intermodal revenue accounted for about 60 percent, or $57 million, of Swift’s non-trucking revenue, which also includes non-asset truck freight brokerage.
That “other revenue” rose 35.4 percent year-over-year, driven primarily by intermodal. Container-on-flatcar revenue increased 35.2 percent in the quarter.
Swift re-engineered and reduced its trailer-on-flatcar business last year. TOFC revenue skyrocketed 255.8 percent in the second quarter, growing from a comparatively small base a year ago.
The trailer operation still represents a small segment of Swift's intermodal business, the company said.
Back on the highway, average rates in over-the-road linehaul service increased 3.3 percent year-over-year. Swift’s weekly revenue per tractor rose 3.8 percent.
“We anticipate our full year 2012 loaded rate per mile, excluding fuel surcharges, to improve between 3.0% and 3.5% on a year over year basis,” the company said.