Daseke (DSKE 2.26%) is a small-cap stock that's one of the largest flatbed and specialized transportation and logistics companies in North America. But flatbed transportation -- even of oversize loads like wind turbine blades, airplane parts, steel, and lumber -- is not a particularly sexy business, and historically, The Motley Fool hasn't written much about Daseke, aside from transcribing the occasional earnings call.
But this morning, Daseke stock surged 28.9% in early trading after reporting third-quarter earnings, and that got our attention. (The stock is still up over 6% at 2:25 p.m. EDT). So today seems like a very fine time to start looking at Daseke more closely.
Daseke reported an earnings beat this morning. Instead of the loss of $0.03 per share that Wall Street analysts had predicted on sales of $357 million, it delivered a massive $0.22 per share profit on sales of $375.8 million. And yet, despite beating earnings, all is far from well at Daseke.
Sales, for example, were greater than Wall Street had anticipated but still down more than 16% from last year's third quarter. Earnings were better than anticipated, too, but mainly when viewed in contrast to a year ago, when Daseke reported a loss of $4.25 per share.
Management struck a cautious note in wrapping up its earnings report, reminding investors who may be relatively new to the company that historically, the second and third quarters have been seasonally strong, with Q4 and Q1 being seasonally slower.
The company didn't give specific guidance for this year's fourth quarter. But the observation about seasonality came with management's note that the third quarter benefited from a number of high-security-cargo projects and an unprecedented backlog of high-margin wind projects (events that probably won't be repeated in the fourth quarter). And those two things probably explain why investors didn't stick around long to enjoy this small-cap stock's early pop today.