Trucking company giant Swift Transportation has reported a big drop in its first quarter profit, falling 59%.
The Arizona-based company reported net income of $12.3 million, or nine cents per diluted share, compared to first quarter 2013 profit of $30.3 million, or 21 cents per diluted share.
Revenue increased $1.01 billion compared to $982 million a year earlier.
“In the first quarter of 2014, we experienced severe winter weather in various markets throughout our network,” Swift said in a statement. “We estimate that the combined negative impact of the severe weather conditions on operating income was approximately $15 million in the first quarter of 2014,excluding Central Refrigerated System”
Swift said in spite of the headwinds it is optimistic about several operational trends it has experienced over the past several weeks.
“Demand continues to increase and capacity remains tight, which has led to improvement in our utilization and rate per mile, and has increased shippers' desire to lock-in capacity,” the company said. “Over the past several weeks, we have also experienced improvement in our accident frequency, moving miles per gallon, and engine idle metrics. However, with the economy improving, our industry's driver market is becoming increasingly challenging”
Swift truckload business reported revenue of $553.1 million in the first quarter compared to $559.6 million a year ago. Loaded miles fell a little more than 3% while deadhead percentage increase to 11.7% from 11.2% a year earlier. Weekly revenue per tractor, minus fuel surcharge increased 1.4%.
In the company’s dedicated segment, revenue increased to $193.7 million compared to $179.2 a year earlier.
“This growth is driven by numerous new accounts that started in the latter half of 2013 and the first quarter of 2014,” Swift said. “Over the course of the first quarter 2014, we added 550 operational trucks to our dedicated segment causing our average dedicated truck count to increase 177 units from 3,675 for the fourth quarter of 2013 to 3,852 for the first quarter of 2014. We expect to increase our second quarter 2014 average operational truck count by approximately 400 trucks over the first quarter average.”
Swift’s Central Refrigerated System business increased revenue, minus fuel surcharge, for the first quarter of 2014 by 2.5% to $83.6 million, compared to $81.6 million for the same quarter in 2013. Swift purchased the company last August.
“This increase…was driven primarily by a significant new dedicated customer added in June 2013 which has a much lower average length of haul, higher deadhead, and a much higher revenue, excluding fuel surcharge per loaded mile,” said Swift. “This increased business was partially offset by lower volumes primarily in the over the road business driven by adverse weather conditions and the systems conversion in February of 2014.”
Swift’s intermodal business overall revenue $93.3 million from $83.3 million a year earlier while its operating ratio fell slightly to 101% from 101.9% during the same time, and is the only operating ratio of the company’s different segments to be over the century mark.
More information is in the Swift letter to shareholders.