Chattanooga-based Covenant Transportation drives higher profits

Chattanooga-based Covenant Transportation drives higher profits

July 24th, 2014 by Staff Report in Business Around the Region

A Covenant Transport truck drives along I-24 over Cummings Highway

Photo by Staff File Photo/Times Free Press.

Covenant Transportation Group, Inc., nearly doubled its second quarter net income from a year ago as the Chattanooga-based trucking firm cut expenses while still raising total revenue by 0.7 percent.

Covenant said today it earned net income of $3.8 million, or 25 cents per share, on revenues of $173.7 million in the three months ended June 30. A year earlier, the trucking firm earned only $1.9 million, or 13 cents per share.

Covenant increased its operating ratio to 95.3 percent as shipments remained strong while Covenant trimmed its truck fleet by 7.8 percent.

"The quarter was characterized by robust freight volumes, customers seeking a high level

of service, an ability to improve yields through lane engineering and

higher rates, and strong competition for an increasingly short supply

of qualified professional drivers," Covenant CEO David Parker said.

As the economy improves, Covenant is having to boost payments to its drivers. Parker said salaries, wages and employee pay adjustments in the past year have cost about 5.3 cents per mile driven.