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Covenant Narrows Loss in Fourth Quarter

February 04, 2010

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Covenant Transportation Group managed to narrow its loss in the fourth quarter, posting $2.7 million, or 19 cents a share, in net loss, compared with a net loss of $39.8 million, or $2.83 a share, in the 2008 quarter
Covenant reduced its average tractor fleet by about 276 trucks from a year ago.
Covenant reduced its average tractor fleet by about 276 trucks from a year ago.
. The company had a third quarter loss of $13.6 million.

Freight revenue was down 5.6 percent to $135.8 million, compared with about $143.9 million for the year-ago quarter. Total revenue dropped 7.7 percent to $157.8 million from $171 million in the same quarter of 2008.

During a conference call discussing the results, Joey Hogan, chief operating officer, said the company was not pleased with its 2009 performance, but that they are hopeful about their present and future performance.

"We believe you will see operating costs continue to decline with improving revenue per truck trends," Hogan said. "We are making significant technology enhancement investments for which implementation will occur during 2010, with expectations of immediate and future benefits. Our summary statement is that we are continuing to focus on good, thoughtful long-term, sustainable decisions. Short term, our entire organization is focused and incentivized on producing a profit for 2010."

In anticipation of lower freight volumes, the company reduced its average tractor fleet by about 276 trucks from the fourth quarter of 2008. This resulted in an increase in average miles per tractor of about 10 percent compared with the year-ago quarter.

"We were very pleased with our utilization trends in that the fourth quarter miles per truck were the highest since fiscal 2003," Hogan said.

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