Covenant Transportation (CVTI) Tops Q4 Revenue Estimates

Covenant Transportation (NASDAQ: CVTI) reported Q4 EPS of $2.68, versus $0.51 reported last year. Revenue for the quarter came in at $203.3 million versus the consensus estimate of $199 million.

Highlights for the quarter included the following:

• Total revenue of $203.3 million, an increase of 6.5% compared with the fourth quarter of 2016.
• Freight revenue of $181.6 million (excludes revenue from fuel surcharges), an increase of 4.7% compared with the fourth quarter of 2016.
• Operating income of $14.8 million and an operating ratio of 91.8%, compared with operating income of $12.3 million and an operating ratio of 92.9% in the fourth quarter of 2016. Operating ratio is defined as: total operating expenses minus fuel surcharge revenue, divided by freight revenue.
• Net income of $49.3 million, or $2.68 per diluted share, compared with net income of $6.0 million, or $0.33 per diluted share in the fourth quarter of 2016.
• In the fourth quarter of 2017, net income includes $40.1 million, or $2.18 per diluted share, of income tax benefit resulting primarily from our reasonable estimate of the revaluation of our net deferred tax balances at December 31, 2017 as a result of the recently enacted Tax Cuts and Jobs Act.
• The fourth quarter effective income tax rates were (261.8%) and 44.6% for 2017 and 2016, respectively. On a non-GAAP basis, excluding the $40.1 million reduction in income tax expense as a result of the Tax Cuts and Jobs Act, the fourth quarter of 2017 effective income tax rate was 32.7%. Primarily as a result of tax-planning strategies implemented during the fourth quarter of 2017, we were able to remove valuation allowances on certain state tax net operating losses providing for additional favorable impact to the effective income tax rate.

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

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