The parent to trucking company Covenant Transport has reported a slight decline in its third quarter profit despite increased revenue.
Tennessee-based Covenant Transportation Group Inc. had income of $1.9 million, or $0.12 per share, compared with net income of $2 million, or $0.13 per share in the third quarter of 2013.
The decline was not surprising with the company announcing last month it was hit with a multi-million dollar judgment against its operation Southern Refrigerated Transport, relating to a cargo claim that happened in 2008 and it would negatively affect third quarter earnings. http://www.truckinginfo.com/news/story/2014/09/covenant-hit-with-huge-judgment-raising-driver-pay.aspx
This resulted in an after-tax impact of approximately $4.6 million, or $0.30 per share, according the CTG.
Total revenue during the third quarter was $177.6 million, an increase of 3.9% compared with the same time a year ago, while freight revenue, which excludes fuel surcharges, was $142 million, an increase of 5.7% during the same time period.
“Our Covenant Transport subsidiary, which focuses on expedited team service, and our Star Transportation subsidiary, which focuses on southeast regional dedicated contract service, both operated solidly below a 90% operating ratio for the quarter,” said Chairman, President, and CEO David R. Parker. “Our Southern Refrigerated Transport subsidiary, which focuses on refrigerated service, also improved significantly, excluding the cargo claim reserve. Throughout the third quarter, we experienced a significant increase in demand, particularly in our expedited team-driver operations and our dedicated contract automotive offering.”
For the quarter CTG reported its asset based operations total revenue increased to $166.8 million, a gain of $6.7 million compared with the third quarter of 2013.
Team-driven trucks increased to an average of 851 teams in the third quarter of 2014, an increase of approximately 7% over the average of 795 in the third quarter of 2013, as well as an increase over the average of 800 teams in the second quarter of 2014, according to the company.
CTG said average freight revenue per tractor per week increased to $3,797 during the third quarter from $3,350 during the 2013 quarter. Average freight revenue per total mile increased by 10.1 cents per mile, or 6.7%, during the same time on an approximately 9.9% increase in average length of haul.
“Our outlook for the fourth quarter of 2014 is positive. For the quarter-to-date, year-over-year increases in average freight revenue per mile, average miles per tractor, and resultant average freight revenue per tractor are trending at or above the year-over-year percentage increases generated during the third quarter,” said Richard B. Cribbs, senior vice president and chief financial officer. “We expect strong customer demand to continue throughout the fourth quarter in all of our service offerings, but particularly in our expedited team and Solutions’ brokerage services.
More information is on the Covenant Transportation Group website.