Trucker narrows its losses

Covenant Transportation Group Inc. on Tuesday reported a narrower first quarter net loss as it cut costs and expenses.

The Chattanooga-based trucking company reported a loss of $5.5 million, or 39 cents per share, in the first quarter compared to a loss of $7.8 million, or 56 cents per share, a year ago.

The consensus analyst estimate was Covenant would lose 35 cents in the quarter.

David R. Parker, the company’s chief executive, said Covenant expects to operate at a loss for the first half of 2009, and its goal remains to make money for the full year.

“After the first quarter, we are running modestly behind the results we anticipated were necessary to reach our goal,” he said. “Although we believe our goal of profitability for 2009 remains achievable, it has become incrementally more difficult to reach.”

For the quarter, total revenue dropped 26.4 percent to $133.8 million from the same quarter of 2008.

Freight revenue, which excludes fuel surcharges, fell 17.8 percent, to $122.1 million in the quarter, the company reported.

Mr. Parker said the results reflect the economic and business trends it had anticipated at the beginning of the year. He said there was weak freight demand, excess tractor and trailer capacity in the truckload industry, and significant rate pressure from customers and freight brokers.

“I am proud of the way our team responded to these difficult operating conditions with cost controls, capital preservation, and personal sacrifices,” he said.

Rob Salmon of Wachovia Capital Markets in a conference call asked which cost-saving initiatives the company identified and if those have been instituted.

Richard Cribbs, Covenant’s chief financial officer, said the company initiatives are “across the board.”

He said he did not have dollar number in terms of the cost controls, most of which have been implemented.