Covenant experiences 1Q net loss

user-gravatar

Covenant Transport has announced its financial and operating results for the quarter ended March 31. For the quarter, total revenue increased 9.9 percent, to $151.5 million from $137.9 million in the same quarter of 2005. Freight revenue, which excludes fuel surcharges, increased 4.7 percent, to $129.4 million in the 2006 quarter from $123.6 million in the 2005 quarter.

The company measures freight revenue because management believes that fuel surcharges tend to be a volatile source of revenue, and the removal of such surcharges affords a more consistent basis for comparing results of operations from period to period. The company experienced a net loss of $884,000 in the 2006 quarter compared with a net loss of $649,000 for the first quarter of 2005.

“The first quarter was pretty typical of first quarters in trucking — a spotty freight market, a couple of big storms, but nothing unusual,” says David R. Parker, chairman, president and chief executive officer of Chattanooga, Tenn.-based Covenant. “Although the freight market in general was not as strong as last year’s, I am pleased to report that Covenant did not experience a large drop-off, as we did in the first quarter of 2005. There was first-quarter seasonality, but nothing more.”

According to Parker, Covenant’s consolidated freight profile changed modestly year-over-year as the results of dividing the company into service offerings began to show in its operating statistics. “Our first two service offerings — expedited team and refrigerated — had the greatest impact,” Parker says. “Longer lengths of haul and improved utilization in those operations, along with significant growth in the refrigerated fleet, contributed higher average miles per tractor and an improvement in nonrevenue miles.”