Swift Transportation has lowered projections for profits for the final two quarters of the year and for the full year, due in large part to at least one accident, legal claims and expected lower freight volume.
The Phoenix, Ariz.-based truckload carrier expects 2015 adjusted earnings per share to be in a range of $1.43 to $1.52, down from an earlier projection of $1.64 to $1.74. It's still higher than the $1.38 in 2014.
Also, in the third quarter it expects adjusted EPS to be 30 to 33 cents, and then 48 cents to 54 cents in the fourth quarter of 2015, down about a third from what many analysts were expecting.
Swift cited several reasons for the revisions:
- 2014 accident and workers’ compensation claims and the affect to cash reserves of 7 cents per share in the third quarter of 2015;
- the settlement of a class action lawsuit and related items which are expected to affect third quarter profit by 2 cents per share;
- the settlement of a previous lawsuit that resulted in a 3 cents per share charge in the second quarter of 2015;
- the additional carrying expense associated with the large volume of new tractors received late in the second quarter, due to delivery delays and the catch up throughout the third quarter that has resulted in a significant backlog of tractors being processed for trade or sale, which is expected to have an impact of approximately 5 cents to 6 cents per share in the second half of 2015; and
- a reduction in expected volume of seasonal business in the fourth quarter of 2015 due to customers’ recent logistical changes, which could have an impact of 5 cents to 6 cents on adjusted EPS.
“Although we are not satisfied with these developments, we are encouraged by many of the underlying operating trends we are experiencing in our business model,” said Richard Stocking, Swift’s president and chief operating officer. “The benefits we are seeing with the new equipment and expect to realize over the next several years should far outweigh the short-term costs we are experiencing."