Covenant Transport Inc., Chattanooga, Tenn., announced financial and operating results for the quarter ended June 30, 2005. Revenue was up approximately 5% to $156.8 million in the 2005 quarter from $149.8 million in the 2004 quarter.

Freight revenue, before fuel surcharges, was $138.7 million in the 2005 quarter and $140 million in the 2004 quarter. The company had net income of $652,000 or $.05 per diluted share, in the 2005 quarter compared with net income of $4.4 million, or $.30 per diluted share, for the second quarter of 2004.
Chairman, President, and Chief Executive Officer David R. Parker stated: "Our results for the quarter were consistent with the guidance we gave last month. Softer than expected freight demand impacted both average miles per tractor and our ability to obtain the level of rate increases we originally expected. Other than a brief period of increased demand in late April and early May, our customer demand did not improve to the seasonal level we expected or needed. As we stated in the first quarter, we believe the decrease in demand has been primarily an issue we need to address with our customers based on their reactions to some of our initiatives last year and secondarily as a reflection of the overall shipping economy.
“Our operating model continues to evolve toward shorter lengths of haul. Our average length of haul was 895 miles in the second quarter of 2005 compared with 941 in the second quarter of 2004. This shift contributes to higher average freight revenue per loaded mile, a decrease in average miles per tractor, and an increase in our percentage of non-revenue miles. The combination of lower than expected freight demand and the continued shift towards shorter lengths of haul contributed to our average freight revenue per tractor per week declining by 1% to $2,961 in the second quarter of 2005 from $2,996 in the second quarter of 2004."
"Our costs were up 10% versus the second quarter of 2004 and were up slightly versus the first quarter of 2005. The main factors driving the cost increases were substantial increases in driver pay and fuel prices. Driver pay was up almost $.06 per mile, or 16%, versus the second quarter of 2004 and about $.025 per mile versus the first quarter of 2005. We believe these driver pay increases are necessary from the industry as a whole to enhance the prospect of attracting additional drivers into the industry. Additionally, diesel fuel costs were up
approximately $.54 per gallon, or 32%, versus the same quarter a year ago. Our fuel costs, net of surcharge revenue, were up $.02 per mile on miles driven by company-owned trucks versus the second quarter of 2004. This equates to a $.09 per share negative impact versus the same quarter of 2004."