Covenant Transportation Group Inc. (CVTI) reported a big gain in third quarter profit. Revenue slipped 2.3% but freight revenue moved higher.
Net income totaled $7.6 million, or 42 cents per diluted share, compared to $1.9 million a year earlier, or $0.12 per diluted share in the third quarter of 2014.
This included a 21% increase in weighted average diluted shares, resulting primarily from the Tennessee-based company’s public offering of 3.036 million common shares completed in November 2014.
Operating income income in the third quarter was $14.6 million, compared with operating income of $5.6 million in the third quarter of 2014.
Total revenue was $173.5 million compared to $177.6 million a year earlier. Freight revenue of $153.5 million, which excludes revenue from fuel surcharges, increase 8.2% year over year.
“Overall, we were pleased with our results in an environment characterized by a competitive market for qualified professional drivers, lackluster freight demand, and falling fuel prices that we did not fully attain because of losses on fuel hedging contracts that we put in place two years ago when diesel fuel prices were higher,” said Chairman, President, and CEO David R. Parker
For the quarter, total revenue in CTG’s asset‑based operations fell to $159.6 million, a decrease of $7.2 million compared with the third quarter of 2014. This decrease consisted of lower fuel surcharge revenue of $15.7 million, partially offset by higher freight revenue of $8.5 million, according to the company.
“The $8.5 million increase in freight revenue related to a 0.4% increase in average freight revenue per tractor per week, a 134-truck, or 5.2%, increase in our average tractor fleet, and a $1 million increase of freight revenue contributed from our refrigerated intermodal service offering,” Parker said.
In the company’s non-asset based broker and other operations, Covenant Transport Solutions, total revenue increased 29.4%, to $13.9 million from $10.7 million in the same quarter of 2014.
Operating income was approximately $923,000 compared with operating income of approximately $484,000 in the third quarter of 2014.
CTG is the holding company for several transportation providers including Covenant Transport, Covenant Transport Solutions, Southern Refrigerated Transport and Star Transportation.
More details are on the CTG website.