Covenant Transportation (CVTI) Prelim. Q3 EPS Falls Short of Consensus
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Covenant Transportation Group, Inc. (NASDAQ: CVTI) announced today its expectations regarding financial results for the third quarter of 2016.
Third Quarter Financial ExpectationsChairman and Chief Executive Officer, David R. Parker, offered the following comments: “After reviewing preliminary financial and operating information through the end of September, we expect to report net income in the range of $2.1 million to $3.2 million, or $0.12 to $0.17 per diluted share, for the third quarter of 2016. This compares to a reported net income of $7.6 million, or $0.42 per diluted share, for the third quarter of 2015. The main differences were higher depreciation, higher claims expense, and lower average freight revenue per tractor, partially offset by improved brokerage gross margin and a favorable effective tax rate. Compared with the third quarter of 2015, depreciation increased $4.6 million, or $0.15 per diluted share, to $19.3 million, primarily as a result of lowering the salvage values effectively increasing the rate of depreciation on a significant percentage of our tractors due to the expectation that the soft used truck market could continue for an extended period. A year-over-year increase in depreciation expense for these tractors will continue to affect our results for at least the next three quarters. We also experienced a $1.7 million, or $0.06 per diluted share, year-over-year increase in casualty insurance and claims expense, primarily as a result of increased frequency and severity of accidents. Average freight revenue per tractor declined 1.2%, due to a weaker truckload freight environment. These factors more than offset improved performance from our Solutions non-asset based brokerage business and a favorable effective income tax rate.”
(Street sees Q3 EPS of $0.25)
Timing of Earnings Release and Conference CallThe Company plans to release its third quarter earnings after 4:00 p.m. Eastern time on Wednesday, October 19, 2016. The Company will hold a live conference call to discuss its third quarter earnings release on Thursday, October 20, at 10:00 a.m. Eastern time. Individuals with questions may dial in at 800-351-4894 (U.S./Canada) and 800-756-3333 (International), access code CTG3. An audio replay will be available for one week following the call at 877-919-4059, access code 71073390. In addition, you will be able to listen to the audio replay for an extended period of time on our investor website, under the icon "Audio Archives". For additional financial and statistical information regarding the Company that may be discussed during the conference call, please visit our website at www.ctgcompanies.com/investor-relations under the tab "Earnings Info."
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