Covenant boosts earnings outlook
With freight volume on the increase, Covenant Transportation Group, Inc., said Wednesday it expects to more than triple its profits in the fourth quarter from a year ago.
The Chattanooga-based trucking company said it is revising upward its earnings expectations for the current quarter and now expects to earn from 70 cents to 78 cents per share, compared with the 22 cents per share earned by the company in the fourth quarter of 2013. Analysts had been forecasting income this quarter from 44 cents to 55 cents per share.
Covenant CEO David Parker said the trucking company “experienced improvements in its operating results” over the past two weeks with revenues up 11.1 percent and average freight revenue per mile up by 10.9 percent. Fuel costs also have dropped, although most such costs are hedged and Parker said the drop in diesel prices will not have a major impact on earnings.
The announcement of the improved outlook came after the market closed Wednesday. During market trading on the Nasdaq exchange Wednesday, Covenant shares fell by nearly 3.2 percent, or 80 cents per share, to close at $24.46 in a day of widespread market lossses. But the company more than made up for the decline in after hours trading.