Covenant Transportation Group, Inc. achieved its best second quarter in company history this year, more than doubling its net income in the three months ended June 30.
The Chattanooga-based trucking company said Wednesday it earned $11 million, or 60 cents per share, on revenues of $175.5 million in the second quarter of the year. A year earlier, Covenant earned $3.8 million, or 25 cents per share, on revenues of $173.7 million.
Buoyed by the profit improvement, Covenant also announced Wednesday a stock repurchase program authorizing the purchase of up to $5 million of Class A common stock. The stock buyback will offset some of the extra 3 million shares Covenant issued last November when it boosted the number of outstanding shares for the company by more than 21 percent.
The second quarter results easily bested what the average forecast of 47 cents per share among analysts who follow Covenant.
"While the pace of domestic economic growth remains uncertain, we believe the trucking economy's freight demand and capacity remain closely in balance as the driver market remains tight," Covenant CEO David Parker said in a statement released after the close of the market.
Parker said he expects average fleet size to be 3 to 5 percent above last year.
"Second half performance will depend to a significant extent on the level of involvement of our asset-based and Solutions subsidiaries in the supply chains of our LTL, parcel, and omni-channel shipping customers during the 2015 peak freight season and the associated pricing for our services," Parker said. "Discussions thus far with major peak season shippers make us optimistic regarding the demand for our service offerings for the remainder of this fiscal year, although pricing and volume negotiations for peak shipments are not yet complete."