Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Knight Transportation (NYSE:KNX) are getting anointed with a rally of as much as 7.5% following a press release raising fourth-quarter-earnings guidance.

So what: The truckload transportation company raised its preliminary estimates to between $0.24 and $0.25 in earnings per share compared to prior estimates of between $0.23 and $0.24. Knight Transportation also raised its estimates for the first quarter of 2014 from between $0.18 and $0.20 to between $0.19 and $0.21.

The company credited the increased expectations with better than expected performance in multiple areas of its business. It saw increased revenue per tractor which implies better leverage and more profits per tractor as well. It also saw "growth in [its] non-asset based business" and its ability to manage its cost more effectively. As with many businesses, each dollar saved on the cost side can lead to an increased dollar on the pre-tax income side.

Knight Transportation also foresees improved demand and "meaningful progress on several internal initiatives focused on improving production, recruiting and developing driving associates, providing industry-leading service, and intensifying our cost control efforts." This implies the strength of its business is coming from a combination of improved industry conditions as well as company-specific efforts to drive demand while improving efficiency. The two would seem to be a win-win combination.

Now what: Analysts had been expecting the company to show $0.21 earnings per share in the fourth quarter, along with $0.19 in the first quarter of 2014. These raised estimates suggest that EPS that could beat expectations by as much as 19% in the fourth quarter 2013 and 10.5% in the first quarter 2014, both of which would be substantial feats considering that analysts had successfully predicted recent estimates.

It's safe to assume that analysts will be raising their estimates for full-year 2014 as well. They were already targeting $0.93, 12% over the $0.83 target for 2013. Given Knight Transportation's history of steady growth, any estimate over $1.00 EPS in 2014 might seem like a fair or better value for Fools to consider because it would put the P/E ratio around 20 or less.

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Nickey Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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