Swift profits slip in Q2, first half 2016 on declining revenues

Trucking and intermodal carrier Swift Transportation reported net income of $42.9 million on revenues of $1.01 billion for the second quarter of 2016, year-over-year decreases of 15.9 percent and 4.5 percent, respectively.    Truckload giant Swift Transportation Co. saw profits and revenues slip in the second quarter and first half of 2016, according to the company’s most recent unaudited financial statements.
   The Phoenix-based trucking and intermodal carrier reported second-quarter net income fell 15.9 percent to $42.9 million compared with second quarter 2015. Diluted earnings per share (EPS) stood at $0.32 per share compared with $0.35 per share the previous year.
   Swift’s revenues dipped 4.5 percent year-over-year to $1.01 billion for the quarter.
   For the first six months of 2016, Swift posted earnings of $74.8 million on revenues of $1.98 billion, year-over-year decreases of 15.8 percent and 4.6 percent, respectively. Diluted EPS reached $0.55 per share compared with $0.62 per share in the same 2015 period.
   The company cited a “challenging” truckload freight market characterized by excess capacity and customer inventories, as well as sluggish demand that have put continued downward pressure on volumes and pricing as the primary cause of the earnings decline.
   Swift’s truckload segment saw revenues slide 6.9 percent year-over-year to $517.6 million for the second quarter of 2016 and 7.7 percent to $1.01 billion for the first half.
   In an effort to offset external industry factors, Swift said it downsized its core truckload fleet to improve asset utilization and increased its participation in the spot market to help offset the lack of available freight in certain markets. In addition, the company instituted several cost control initiatives, including streamlining processes, reducing headcount, postponing noncritical system implementations, and cutting expenditures.
   Revenues for dedicated contract carriage, on the other hand, ticked up 1.3 percent to $237.2 million in the second quarter and 2.9 percent to $465.1 million for the first six months of the year.
   Central Refrigerated Service, Swift’s reefer unit, saw revenues tumble 10.9 percent and 11.1 percent, respectively, to $87 million and $171.8 million during the same periods.
   Intermodal revenues stood at $90.1 million for the second quarter and $172.6 million for the first half of the year, year-over-year drops of 8.6 percent.
   “Despite the challenging freight environment that persisted throughout the second quarter of 2016, we continue to make positive enhancements in several key areas,” Swift said in a statement. “The Operating Ratios and Adjusted Operating Ratios in all four of our reportable segments improved sequentially, when compared to the first quarter. We believe these improvements illustrate our ability and desire to drive continued progress in value creation for you, our stockholders.”
   Given a projected depreciation adjustment in the third and fourth quarters, as well as a more conservative internal outlook for the second half of the year, Swift said it now expects full year 2016 GAAP diluted EPS to be in the range of $1.23 to $1.33 per share.