Covenant Transportation net income up in 2015

Carl Austin Watson David Parker

Covenant Transportation Group Inc. on Monday reported a slight dip in earnings in the fourth quarter despite the company's issuance of another 3 million shares of stock last year.

But the Chattanooga-based trucking company still stayed ahead of analysts' expectations in its results for the end of 2015.

Covenant said it earned net income of $13.2 million, or 73 cents per share, on revenues of $208.1 million in the final three months of 2015. A year earlier, Covenant earned $13.5 million, or 82 cents per share, on revenues of $206.9 million, prior to the company boosting its outstanding stock by about 10 percent.

Analysts had forecast Covenant would earn 67 cents per share on revenues of about $185.8 million in the three-month period ended Dec. 31.

For all of 2015, Covenant reported net income of $42.1 million, or $2.30 per share, on revenues of $724.2 million. In 2014, Covenant had net income of $17.8 million, or $1.15 per share, on revenues of $719 million.

The 2015 year included a federal income tax credit of about $4.7 million and included the favorable impact of $3.5 million pretax from previously expensed casualty insurance premium benefits.

"Net income for the fourth quarter was essentially the same as last year in a materially softer overall freight environment," Covenant CEO David Parker said in a statement. "Our expedited operations and solutions' brokerage performed very well for the supply chains of our e-commerce, LTL and omni-channel shipping customers during the 2015 peak freight season, which in turn helped them satisfy the American consumers who increasingly rely on these services."

Parker said the company's profits from record shipments during the peak holiday season "was offset by temporarily ramping up staffing costs to cover the 24/7 nature of this business, softness in other parts of our truckload business, and external market-driven related accruals relating to negative fuel hedge positions and the reduced values of trucks given a softer Class 8 used truck market."