Shares of Covenant Transportation Corp., jumped nearly 17 percent Tuesday after the company said its fourth quarter earnings in 2013 could double the year-ago levels.
Covenant CEO David Parker said the Chattanooga-based trucking giant should earn between 18 cents and 22 cents per share in the the fourth quarter, up from 10 cents a share a year earlier. Parker said higher freight volumes and margins produced better profits in the final three months of 2013.
Analysts had forecast that Covenant would earn between 8 cents and 13 cents per share in the fourth quarter.
The better-than-expected fourth quarter results pushed up the stock value of Covenant on Tuesday to the highest level in more than two and a half years. In trading on the Nasdaq Exchange Tuesday, Covenant shares jumped more than 16.8 percent to $9.17 per share. Covenant shares are up 64 percent from a year ago.
"The expected improvement in earnings per diluted share relates primarily to higher freight revenue per tractor (excluding fuel surcharge revenue) in our asset-based business, significant improvement in revenue and margins in our non-asset based Covenant Transport Solutions business, and lower costs of fuel (net of fuel surcharge recovery)," Parker said in a statement. "During December, we experienced a significant increase in demand, particularly in our expedited team-driver operations, which supported higher than expected freight revenue per mile (excluding fuel surcharge revenue) and miles per tractor."
Parker said the December "was unusual and related, at least in part, to the compressed period of time between Thanksgiving and Christmas" in 2013."
Covenant plans to release its year-end earnings report on Jan. 27.