Shares of trucking company Covenant Transportation Group fell 18.6 percent Thursday as it projected a larger-than-expected first-quarter net loss due to diesel fuel costs.
David R. Parker, Covenant’s chairman, president and chief executive officer, said the company is expected to report a 40 cent to 50 cent per share loss in the period.
Analysts had projected the Chattanooga-based trucker to post a 15 cent per share loss.
The company’s shares closed at $5.56, down $1.27.
Mr. Parker cited the unprecedented run-up in the cost of diesel fuel, which more than overcame improvements in miles per truck and cost control efforts.
“The combination of high fuel prices, the lag time between the adjustment of fuel surcharges, and a slowing economy that has increased shipper resistance to paying surcharges, contributed to a significant increase in net fuel costs,” the CEO said.
Excluding the impact of fuel prices, he said Covenant continued to progress in its plan to improve operating efficiency.
Senior Executive Vice President Joey B. Hogan said Covenant's financial condition and liquidity remain sound.
“Based on our financial and operating results to date, and our present expectations for the quarter as a whole, we expect to comply with all of our financial debt covenants” for the quarter, he said.
The company announced tentative plans to release its first-quarter earnings after the market closes on April 22.
Get breaking news from the Times Free Press on Twitter at www.twitter.com/timesfreepress
