Impacted by weak freight demand, overcapacity in the truckload industry and pricing pressure from customers, Covenant Transportation Group experienced a net loss of $3.1 million in the second quarter
. During the same quarter of last year, the company lost $2.3 million.
Total revenue dropped 31 percent to $144.1 million, down from $208.7 million during the year-ago period for the Chattanooga, Tenn.-based carrier. The company attributes $33.4 million of the decrease to lower fuel surcharge revenue, while the remaining balance of the decline was due to lower freight revenue. Freight revenue decreased to $129.2 million, a 19.4 percent decline from 2008's $160.5 million.
"Our team is managing the company in this environment by implementing efficiencies in every aspect of our business, making tough cost-cutting decisions, and prudently managing our tractor and trailer capital expenditures while maintaining a relatively young fleet," said David Parker, chairman, president and CEO.
Compared with the second quarter of 2008, the company cut its average tractor fleet by about 388 trucks, or 11.2 percent, in anticipation of weak freight volumes.
Covenant Transport Solutions, the company's brokerage subsidiary, saw a decrease in total revenue of 14 percent to $11.7 million, versus $13.5 million for the same quarter of 2008. The subsidiary's net revenue was down 16 percent.
"Based on our second quarter results, to attain profitability for the second half of 2009 will require us to implement additional identified cost savings, avoid multiple large casualty claims, maintain net fuel costs at current levels, hold rates steady, and slightly improve utilization of our remaining fleet of trucks for the rest of the fiscal year," Parker said.
. During the same quarter of last year, the company lost $2.3 million.
Total revenue dropped 31 percent to $144.1 million, down from $208.7 million during the year-ago period for the Chattanooga, Tenn.-based carrier. The company attributes $33.4 million of the decrease to lower fuel surcharge revenue, while the remaining balance of the decline was due to lower freight revenue. Freight revenue decreased to $129.2 million, a 19.4 percent decline from 2008's $160.5 million.
"Our team is managing the company in this environment by implementing efficiencies in every aspect of our business, making tough cost-cutting decisions, and prudently managing our tractor and trailer capital expenditures while maintaining a relatively young fleet," said David Parker, chairman, president and CEO.
Compared with the second quarter of 2008, the company cut its average tractor fleet by about 388 trucks, or 11.2 percent, in anticipation of weak freight volumes.
Covenant Transport Solutions, the company's brokerage subsidiary, saw a decrease in total revenue of 14 percent to $11.7 million, versus $13.5 million for the same quarter of 2008. The subsidiary's net revenue was down 16 percent.
"Based on our second quarter results, to attain profitability for the second half of 2009 will require us to implement additional identified cost savings, avoid multiple large casualty claims, maintain net fuel costs at current levels, hold rates steady, and slightly improve utilization of our remaining fleet of trucks for the rest of the fiscal year," Parker said.
media brand
0 Comments
See all comments