Moody’s Investors Service boosted its outlook for Swift Transportation to positive from stable as the nation’s largest truckload carrier rebuilds its business.
Swift reported a $90.6 million net profit for 2011, its first annual profit since 2006. The carrier suffered four straight years of losses exceeding $817 million.
“Volumes are improving, operating metrics are favorable, and our driver pipeline continues to be full,” the $3.3 billion truckload carrier said in January.
Moody’s expects increasing freight demand and strong truckload pricing will help the Phoenix-based company increase its revenue and remain profitable.
“We expect that Swift will be able to sustain operating margins in the 8 to 10 percent range through 2013,” Moody’s said Thursday.
“Robust cash flow” over the next few years will help Swift purchase equipment and repay “modest amounts” of debt, the investment ratings firm said.
Swift’s new “B2” rating takes into account the trucking company’s commitment to reducing debt while maintaining fleet investments, Moody’s said.
Since 2008, Swift has cut its net debt by 34.5 percent to $1.7 billion, according to a February 2012 investor overview from the publicly owned company.