Yesterday's round of fleet financials saw mixed results, with many carriers reporting drops in net income despite increased revenue - some even big losses. Some companies, however, managed a small increase in net income despite the economic slowdown.

Covenant Transport, Chattanooga, Tenn., saw an expected drop in earnings despite a 4% increase in revenue over the same quarter last year. The company attributed the decrease to sluggish freight demand, higher fuel expense and increased insurance costs.
Revenue for the first quarter was $131.3 million, compared to last year's $126.5 million. Net income dropped 89%, from $2 million in first quarter 2000 to $229,000 the first quarter of 2001.
"Although utilization declined 1% for the quarter, over the last seven weeks we have seen positive utilization trends that give us hope that we have "hit the bottom'," said Covenant Chairman, President and CEO David Parker. "Freight demand has improved in March and April, although it remains less than robust."
UPS, Atlanta, saw 4% revenue growth in the first quarter despite the economic slowdown, but net income of $582 million was down nearly 9% compared to a year earlier. Revenues totaled $7.5 billion. The first quarter saw UPS grow across all product lines despite the challenges of an unexpectedly steep drop in U.S. economic activity. Most of that growth was international, but UPS Next Day Air grew 3.3% and total average daily volume within the United States rose 1.3%. The company is cutting capital expenditures by about $300 million this year.
Similarly, USFreightways, Chicago, saw its net income for the quarter fall to $8.5 million, compared to $22.3 million a year ago. Revenue, however, was higher than last year: $621.4 million compared to $618.7 million reported for the first quarter of 2000.
Less-than-truckload revenue at USFreightway's regional trucking subsidiaries dropped 1.8% from the 2000 first quarter, LTL shipments decreased 2.8% and LTL tonnage decreased 5.1%. Michigan-based USF Holland was affected the most, because of the dramatic slowdown in the automotive industry and other heavy manufacturing based in the central United States.
The news wasn't good at Transport Corporation of America, Minneapolis, which reported a $752,000 loss in the first quarter, compared to 2000 first quarter net income of $914,000. Revenues were down as well, with $66.1 million, compared with 2000 first quarter revenues of $72.2 million.
"The slowing economy and severe weather clearly had a negative impact on our revenues during the first quarter, as we experienced a general slowing of freight shipments by our major accounts," said Robert J. Meyers, Transport Corp. President and CEO. "Two of our largest customers reduced their respective shipping volumes by over 30% during the quarter."
The company has added significant new business starting in the second quarter and is working on extending geographic coverage to the West, recently opening a new service center in Southern California.
Losing money is still the story at Consolidated Freightways, Vancouver, Wash., reported a net loss of $1.8 million for the quarter. Capital gains from the sale of the company's Portland administrative facility improved net income by $11.6 million. This compares to a net loss last year of $3 million. The company had revenue of $574.6 million for the first quarter, down 3.2% compared to the first quarter last year. Total tonnage decreased 5.1% compared to the first quarter last year, with less-than-truckload tonnage down 5.9%. Company officials anticipate tonnage growth in the second half of the year and forecast a profitable second half, thanks to significant cost cutting and an economy that is expected to improve.
However, Landstar System, Jacksonville, Fla., managed to eke out a slightly better net income this year than last, showing $8.4 million, compared to $8.3 million for the first quarter of 2000. Revenue was a record $331 million, compared with $327 million for the same time last year. This quarter, Landstar invoiced $11.5 million in fuel surcharges, passed on to its owner-operators, compared to only $3.8 million a year ago.
"Despite a slowing U.S. economy, Landstar was able to achieve record results in the 2001 first quarter," said Landstar Chairman, President and CEO Jeff Crowe. However, Landstar ended the first quarter with 100 fewer trucks than it had at the beginning of the year. Although the number of owner-operators leaving was about the same as last year, with the current economy, not as many owner-operators were recruited. The company believes it will be able to replace those trucks by the end of the year.
Another company with positive first quarter results was Marten Transport, Mondovi, Wis., which reported record first-quarter revenue and net income. First-quarter net income increased to $1.65 million, up from $1.62 million in the first quarter of 2000. Revenue was $70 million, an increase of 16% from $60.3 million in the first quarter last year.
"This was our eighth consecutive quarter of double-digit percentage increases in operating revenue," said Randy Marten, president and chairman. "Our key productivity measures show improvement in the level of equipment utilization, which -- along with fuel surcharges -- helped offset the higher cost of diesel fuel."
P.A.M. Transportation Services, Tontitown, Ark., reported net income of $2.6 million, up from net income of $2.1 million for last year's first quarter. Revenues for the first quarter of 2001 increased 7.9% to $58.4 million compared to $54.1 million in the same quarter of 2000.