Covenant Transportation Group Inc. shares plunged to their lowest level since May 2009, after the company announced Friday it will report a third-quarter loss.
The Chattanooga trucking company's stock opened at $3.39 per share Friday, and dipped nearly 30 percent before closing Friday with a drop of 62 cents per share to $2.73, down 18.5 percent, in trading on the Nasdaq Exchange.
That drop followed a 30-minute trading halt of the company's stock as Covenant said it expected to announce a loss of $500,000 to $1.7 million. The company reported net income of $1.9 million in 2010 and, prior to Friday's announcement, analysts had expected the company to remain profitable this summer.
Trucking companies are often seen as an early barometer of the economy. As the pace of the recovery has stalled, Covenant's revenue per truck miles dipped almost 10 percent.
The company also saw a bump in expenses related to salary, wages, fuel, operations, maintenance and insurance, Covenant President David Parker said in a statement.
Those costs are expected to more than offset a 5 percent to 6 percent increase in freight revenue per mile, excluding fuel surcharge revenue, he said.
Parker also announced Covenant revised the terms of a revolving credit facility with Bank of America and J.P. Morgan to avoid a default after the loss.
"We are presently working with our lenders on a longer-term amendment to the financial covenant calculation that would address our operating and fixed asset expectations as well as the forecast of many economists of a U.S. economy with little or no growth for an extended period," Parker said.
Covenant expects to release its third-quarter report Oct. 25.
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