Covenant Transport today raised it profit outlook for the first quarter after freight revenue rose a better-than-expected 6.3 percent in the first couple of months of 2018.
Covenant CEO David Parker said the Chattanooga-based trucking company expects to earn 17 cents to 23 cents per share in operating income in the first three months of 2018. That is significantly better than the average forecast of 14 cents per share forecast for the first quarter by analysts who follow the company, according to Yahoo News. It is also a turnaround from the first quarter of 2017 when Covenant reported a net loss of $39,000.
"The truckload freight environment has been favorable during the first quarter to date, leading to operating results that are exceeding our expectations," Parker said.
Covenant said average freight revenue per tractor during January and February increased 6.3 percent compared to the two months ended February 28, 2017 and Parker said that March results are mirroring the first two months of the year.
Some of those gains were offset by higher pay and purchased transportation expenses, Park said.
Covenant Transportation Group, Inc. is the holding company for Covenant Transport and Covenant Transport Solutions of Chattanooga; Southern Refrigerated Transport of Texarkana, Arkansas; and Star Transportation of Nashville, among other businesses.
Covenant announced the improved outlook for the first quarter late today, but the company's stock closed down nearly 1.1 percent, or 29 cents per share, at $26.92 on Wednesday.
But over the past 12 months, shares in Covenant Transport have risen by more than 40 percent.