Sam Hodgson/Bloomberg News
Swift Transportation reported profits plunged 84% in the first quarter compared with 2016 as truckload carriers suffered from continued excess capacity and lower contract prices than they had hoped for this year.
The Phoenix carrier earned only $5.2 million in profits, or 4 cents per share, well below the $31.9 million and 23 cents one year ago. The results were 7 cents below forecasts from industry analysts, according to a Bloomberg News survey. However, Swift was quick to note that it fell short of its own forecasts due to a change in a 5-year-old class-action lawsuit involving the old Central Refrigerated Service.
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“On April 13, 2017, we proposed a tentative settlement arrangement with regard to certain previously disclosed litigation in the refrigerated segment, which was originally scheduled to commence arbitration trial the week of April 24, 2017. As a result, in accordance with GAAP [generally accepted accounting principles], we increased our legal reserves by $11.7 million, or $0.06 per share as of March 31, 2017,” the company wrote in a letter to investors, referring to the Utah Collective and Individual Arbitration.
Former employees Gabriel Cilluffo, Kevin Shire and Bryan Ratterree filed a class-action lawsuit against Central Refrigerated Service in June 2012, alleging that they were misclassified as independent contractors rather than employees and thus violated the Fair Labor Standards Act.
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