Covenant Net Income Doubles in Final Quarter of 2013
January 27, 2014
The parent to several freight transportation providers, including Covenant Transport, has released numbers showing net income doubled in the final quarter of the year, but there was a slight decline for all of 2013.
Chattanooga-based Covenant Transportation Group says during the fourth quarter of 2013, total revenue was $176.5 million, a decrease of 0.6% compared with the fourth quarter of 2012.
Freight revenue, which excludes revenue from fuel surcharges, was $140.4 million, an increase of 0.8% compared with the fourth quarter of 2012.
Net income during the period was $3.3 million, or 22 cents per share, compared with net income of $1.5 million, or 10 cents per share in the fourth quarter of 2012.
For all of 2013, total revenue increased 1.5%, to $684.5 million from $674.3 million for 2012.
Freight revenue increased 2.2% to $538.9 million in 2013 from $527.4 million in 2012.
The company reported net income of $5.2 million, or 35 cents per share, for 2013 compared to net income of $6.1 million, or 41 cents per share in 2012.
"For the quarter, total revenue in our asset-based operations decreased to $164.9 million, a decrease of $5.3 million compared with the fourth quarter of 2012,” said Chairman, President, and CEO David R. Parker. “This decrease consisted of lower freight revenue of $3.1 million, along with lower fuel surcharge revenue of $2.2 million.
"The $3.1 million decrease in freight revenue related to a 5.7% decrease in our average tractor fleet, partially offset by a 2.2% increase in average freight revenue per tractor per week and an increase of freight revenue contributed from our refrigerated intermodal service offering.”
He said average freight revenue per tractor per week increased to $3,568 during the 2013 quarter from $3,490 during the 2012 quarter. Average freight revenue per total mile increased by 3.9 cents per mile, or 2.6%, compared to the 2012 quarter, while average miles per unit decreased by 0.3%. On average, approximately 5% of its fleet lacked drivers during the 2013 quarter, compared with approximately 3.2% during the 2012 quarter.
For Covenant Transport Solutions, the company’s non-asset based subsidiary, total revenue increased 58.6% for the quarter, to $11.6 million from $7.3 million in the same quarter of 2012. Operating income was approximately $697,000 for an operating ratio of 94%, compared with an operating loss of $368,000 and an operating ratio of 105% in the fourth quarter of 2012.
"In 2013, we took delivery of approximately 1,054 new company tractors and disposed of approximately 800 used tractors, while holding several additional trucks out of service as they are prepared for disposal or are already available for disposal at Dec. 31, 2013,” said Richard Cribbs, senior vice president and CFO.
The company's equipment plan for 2014 includes the delivery of approximately 950 new company tractors and the disposal of approximately 1,250 used tractors.
Covenant expects its fiscal 2014 average truck count to essentially equal that of fiscal 2013.
“With a relatively young average company tractor fleet age of 1.9 years at Dec. 31, 2013, we believe there is significant flexibility to manage our fleet, and we plan to regularly evaluate our tractor replacement cycle and new tractor purchase requirements,” Cribbs said.
More information is available on the Covenant Transportation website.