Covenant Transportation Group Inc. said today that first quarter adjusted earnings rose to $5 million, or 27 cents per share, surpassing last year’s results and staying ahead of analysts forecasts for the quarter.
The Chattanooga-based trucking company exceeded the earnings forecast by 4 cents per share and were up by 12.5 percent from year ago. The truckload transportation services provider posted revenue of $219.2 million in the period, up 26.3 percent from a year ago, due largely to the purchase last year of LandAir Inc.
“Our adjusted earnings per share for the first quarter were above the range of our March guidance and higher than the 2018 quarter despite a significantly weaker freight environment,” Covenant CEO David Parker said in today’s earnings announcement. “The Landair acquisition in July 2018, the growth of our other dedicated and brokerage business, and improved profitability from our factoring business and our minority investment in Transport Enterprise Leasing more than offset the impact of lower revenue per tractor and higher operating costs.”
“Although we are not satisfied with our first quarter financial results, we believe they reflect less impact from the reduced freight demand than in historical periods, as our growing dedicated and more contractually guaranteed service offerings generated approximately double-digit operating margins while our more seasonal and cyclical service offerings generated low single digit to negative operating margins,” he added.
Parker said April’s freight environment “has improved sequentially from the first quarter,” but he said it is still down from a year ago.
Covenant Transportation shares have risen more than 3 percent since the beginning of the year but are down 38.6 percent from a year ago.