Covenant reports 1Q net loss on higher revenue

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Covenant Transportation Group on Monday, April 21, announced financial and operating results for the first quarter ended March 31.

For the quarter, total revenue increased 9.2 percent to $181.7 million from $166.4 million in the same quarter of 2007. Freight revenue, which excludes fuel surcharges, increased 3.5 percent to $148.6 million in the 2008 quarter from $143.5 million in the 2007 quarter. The Chattanooga, Tenn.-based company reported net loss of $7.8 million compared to a net loss of $2.1 million for the first quarter of 2007.

Covenant said that with diesel prices increasing further since the end of the first quarter, and with the freight environment remaining highly competitive, that it expects difficult operating conditions to persist in the second quarter. Fuel prices, average revenue per total mile, and the percentage of fuel price recovery through fuel surcharges are expected to be the largest items impacting operating results for the foreseeable future, according to the company.

Given the volatility of fuel prices and the unfavorable relationship between supply and demand in its markets, Covenant said it believes that operating results will be difficult to predict for the foreseeable future.