Covenant Logistics Group Co., Ltd. (CVLG – Free Report) will report its fourth quarter 2022 results after the market close on January 25.
The Zachs Consensus estimate for CVLG’s fourth quarter 2022 earnings was flat at $1.51 per share over the past 60 days. The company has beaten Zachs consensus estimates in each of the last four quarters, averaging 22.67% above his average, a stunning performance.
With that in mind, let’s take a look at the factors that may have shaped the company’s December quarter results.
Freight demand is slowing given supply chain woes and inflationary pressures. Therefore, the carrier’s results for the forthcoming quarters are expected to be weaker due to lower freight revenues. Sachs’ consensus forecast for fare revenue is down 4.1% from his Q3 2022 performance.
Declining freight revenues could hurt the total revenues of CVLG’s trucking operations. The Zachs consensus forecast for trucking revenue (trucking combined) shows a 23.2% decline from Q3 2022 actual.
However, fuel surcharge earnings may have been higher due to higher fuel prices. Sachs’ consensus forecast for fuel surcharge revenue shows a 45% increase from Q4 2021 performance.
What does the Sachs model say?
The proven Sachs model is not a definitive predictor of Covenant Logistics’ earnings at this time. A combination of a positive return ESP and a Zacks rank of 1 (strong buy), 2 (buy), or 3 (hold) increases the likelihood of breaking the quote, which is not the case here.you can see See the full list of today’s Zacks #1 ranked stocks here.
Revenue ESP: Covenant Logistics has a revenue ESP of 0.00% and the most accurate estimate is in line with the Zacks consensus estimate. Earnings ESP filters help you find the best stocks to buy or sell before they’re reported.
Zack Rank: Covenant Logistics currently holds Zacks Rank #3.
Stocks to consider
Investors interested in the broader transportation sector may consider jetblue airlines (JBLU – free report) and Norfolk Southern Corporation (Nippon Steel – Free Report) because these stocks have the right mix of factors to beat the gains in this reporting cycle.
jet blue Has +20.59% Profit ESP and Zacks rank #3. JBLU will announce the results on his January 26th.
JBLU’s fourth quarter results are expected to be supported by strong air travel demand. However, the high cost can act as an attenuator.
Norfolk Southern Has +0.55% Earnings ESP and Zacks rank #3. The NSC will announce his results on January 25th.
We expect a positive demand scenario to boost NSC’s fourth quarter results. However, high fuel costs can act as a dampener.
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