How Swift Transportation Surprised Investors With Earnings

Swift Transportation Co. (NYSE: SWFT) released its fourth-quarter earnings report after the markets closed on Monday and surprised many investors. The company posted $0.53 in earnings per share (EPS) on $1.09 billion in revenue. The consensus estimates called for EPS of $0.47 and $1.11 billion in revenue.

Previously, Swift anticipated that the fourth quarter would have EPS in the range of $0.47 to $0.51, which the company topped handily. This was amid weak freight demand and changes within the logistics business.

What sets this performance apart from others is that it exceeded Swift’s previously announced expectations, driven by strong operational performance. The company was able to generate year-over-year rate increases in its three largest reportable segments, despite difficult comparison quarters. Investments in fleet technology are also beginning to pay off, with improved accident and workers’ compensation trends, driver retention and fuel efficiency in the quarter. Swift also realized improvements in its Intermodal container turns.

As a result, the company repurchased $70 million of its shares in the fourth quarter, which resulted in a reduction in Swift’s weighted average share count of 2.4 million and 0.6 million for the fourth quarter and full year of 2015, respectively.

In terms of guidance, for the 2016 full year the company expects EPS in the range of $1.50 to $1.60, compared to the consensus estimates of $1.55 in EPS on $4.39 billion in revenue.

Shares of Swift were trading up nearly 17% at $15.97 on Tuesday, with a consensus analyst price target of $19.53 and a 52-week trading range of $11.74 to $28.90.