Covenant Transportation Group on Wednesday reported an upturn in its business for the second quarter of 2010, with profit rising on higher revenue.
The Chattanooga-based company reported net income of $2.9 million, or 20 cents per share, from a loss of $3.1 million, or 22 cents per share in the second quarter of 2009.
Revenue increased 17.3 percent to $169 million, up from $144.1 million in the second quarter of 2009.
David R. Parker, Covenant Transportation’s chief executive, said the quarter “marked our best financial and operating performance in several years.”
He credited “a favorable and strengthening freight market” for affording the company “the opportunity to capitalize on our improved operations and increase equipment utilization.”
But he expressed a note of caution, saying a good quarter does not mean the hard work is over.
“With the pace of economic growth uncertain and the driver market tightening, we intend to remain focused on improving the productivity of our existing fleet, operating efficiently and positioning our company for long-term success.”
Richard B. Cribbs, senior vice president and chief financial officer, said the company will replace 1,050 tractors, a capital expenditure of more than $68 million.
“With a relatively young average fleet age of 22 months at June 30, 2010, we believe there is significant flexibility to manage our fleet and we plan to regularly evaluate our tractor replacement cycle and new tractor purchase requirements,” he said.
Covenant’s stock closed Wednesday at $8.28, down 25 cents.