Covenant Transportation (CVTI) Tops Q3 EPS by 1c

Covenant Transportation (NASDAQ: CVTI) reported Q3 EPS of $0.42, $0.01 better than the analyst estimate of $0.41. Revenue for the quarter came in at $173.5 million versus the consensus estimate of $180.25 million.

Guidance:

CFO Richard B. Cribbs commented: “We expect our average fleet size for fiscal 2015 to be approximately 3%-5% above that of fiscal 2014. Fourth quarter performance will depend to a significant extent on the level of involvement of our asset-based and Solutions subsidiaries in the supply chains of our LTL, e-commerce, parcel, and omni-channel shipping customers during the 2015 peak freight season and the associated pricing for our services. In general, we expect a solid fourth quarter. The combination of our major peak season shippers have contracted for a higher volume of committed capacity than last year, but at lower contractual rates on average than last year. The combination of volumes, routes, and pricing is expected to be efficient and attractively profitable – perhaps generating more income on the contractual side than last year’s contractual freight. However, this will leave a lower percentage of our fleet available for seasonal spot market business which was extremely profitable last year, but might be less so this year. We are not yet prepared to forecast whether our net income will improve versus the fourth quarter of 2014. Regardless, absent unexpectedly high peak freight market demand, earnings per share may decrease compared to the 2014 quarter given current market conditions, our fuel hedging position at current fuel prices, and the headwind of the 11-12% higher estimated quarterly weighted average diluted share count for the fourth quarter of 2015.

For earnings history and earnings-related data on Covenant Transportation (CVTI) click here.

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