The freight economy in the U.S. is slowing, and softer truckload shipment volumes and rising fuel costs are squeezing earnings at some of the largest U.S. transport operators.
Swift Transportation said Wednesday it expected third quarter adjusted earnings per share between 20 to 23 cents, below a 23-cent Wall Street consensus estimate.
Less-than-truckload carrier ABF Freight System also said it expects tonnage to decline by 2 percent in the third quarter from a year ago.
Investment research firm Stifel Nicolaus on Thursday warned investors it was lowering long-term earnings expectations for several truckload carriers.
“The trucking market has not seen as strong a seasonal increase at the end of August and beginning of September as it historically would,” Stifel Nicolaus said.
The company lowered earnings per share estimates for 2012 through 2014 for truckers Heartland Express, Knight Transportation and Marten Transport.
“The downward revisions to our 2013 and 2014 EPS estimates reflect an expectation for even more modest economic growth,” Stifel Nicolaus said.
The truckload carriers are keeping pace with the economy as a whole, which has been expanding more slowly in 2012 than 2011. They reported rising revenue and profits in the second quarter.
Swift, for example, increased revenue 2.6 percent year-over-year in the most recent quarter to $872.6 million, while its profit rose 72 percent to $33.7 million.
However, that revenue gain was smaller than a 9 percent increase in the first quarter, a 10.3 percent jump in the fourth quarter and 15.5 percent in the year ago quarter.
Over the long-haul, asset-based truckers are likely to benefit from tighter capacity, increasing revenue and profit, Stifel Nicolaus said in a Sept. 20 note to investors.
“A continued steady, slow economic growth rate should continue to yield carriers rate increases above cost increases,” the company said.
Contact William B. Cassidy at firstname.lastname@example.org. Follow him on Twitter at @wbcassidy_joc.