Covenant Transportation Group Earnings: Here’s Why Shares are Down Now

Covenant Transportation Group, Inc. (NASDAQ:CVTI) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.79%.

Covenant Transportation Group, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 55.17% to $0.13 in the quarter versus EPS of $0.29 in the year-earlier quarter.

Revenue: Rose 0.7% to $172.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Covenant Transportation Group, Inc. reported adjusted EPS income of $0.13 per share. By that measure, the company beat the mean analyst estimate of $0.07. It beat the average revenue estimate of $170.4 million.

Quoting Management: Chairman, President, and Chief Executive Officer, David R. Parker, made the following comments: “Operating results were comparable to last year’s second quarter, excluding the net $3.5 million gain (or $0.15 per diluted share) relating to a refund of insurance premiums in the 2012 quarter. Our recent re-allocation of assets to our team and refrigerated operations, reducing exposure to solo dry van operations, along with further improving on our drivers’ employment experience resulted in improved asset productivity. These factors contributed to a 3.6% increase in average freight revenue per tractor compared with the second quarter of 2012. Our asset-based operating ratio was 95.3% compared with 93.9%, excluding the $3.5 million net favorable impact from the insurance policy release.

Key Stats (on next page)…

Revenue increased 4.72% from $164.73 million in the previous quarter. EPS increased to $0.13 in the quarter versus EPS of $-0.13 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.14 to a profit $0.08. For the current year, the average estimate has moved down from a profit of $0.3 to a profit of $0.18 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)