Covenant Transportation Group on Tuesday reported sharply higher first-quarter net income based on improved margins in its expedited, dedicated and solo refrigerated trucking lines.
Net income hit $4.4 million, or 24 cents per diluted share, compared with a net loss of $39,000 a year ago, according to the Chattanooga-based company.
The trucking business reported operating income of $6.4 million compared with operating income of $300,000 in the first quarter of 2017.
Total revenue in the quarter was $173.6 million, up 9.3 percent, the company reported.
"We were pleased that each of our three asset-based units - expedited, dedicated, and solo refrigerated - generated an improved operating margin compared with the 2017 quarter," said David R. Parker, the company's chairman and chief executive officer, in a statement.
Meanwhile, Covenant Transport Solutions, the company's nonasset-based managed freight subsidiary, posted operating income of $1.1 million in the first quarter, down from $1.4 million a year ago.
Covenant cited a more competitive market for sourcing third party capacity for the drop.
Richard B. Cribbs, the company's executive vice president and chief financial officer, said Covenant is forecasting sequential operating income improvement in each of the remaining quarters of 2018.
"Based on our expectation of a continuation of recent U.S. economic growth, as well as continued regulatory and demographic capacity constraints on driver availability, we expect year-over-year average freight revenue per total mile to be positive over the remainder of the year by a high single digit percentage," he said.
Covenant's shares on the NASDAQ closed at $28.86, down 96 cents, or 3.22 percent.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.