Despite a gain in freight revenue, net income for the Covenant Transportation Group fell by 60 percent in the second quarter compared with a year ago.
But the Chattanooga-based trucking company still beat Wall Street estimates for the period by a penny a share in the company's second quarter.
Covenant said today it earned $1.5 million, or 8 cents per share, on revenues of $164.3 million. In the same period a year earlier, Covenant earned $3.6 million, or 20 cents per share, on revenues $160.2 million. On average, analysts had forecast the company would earn 7 cents per share in the second quarter.
Covenant CEO David Parker said freight demand is increasing this summer and the company expects improved freight revenue in the third quarter.
"Freight demand built throughout the quarter and continues to be favorable in July on a seasonally adjusted basis," Parker said in the earnings report today. "April was the slowest month overall, in part due to reduction of a portion of freight from customers as we made decisions to protect our yield model in our expedited service offering. In addition, we assisted customers in our dedicated service offering to re-engineer improved efficiency of their freight network that resulted in a reduction of the number of high-utilization dedicated trucks that they required from us."
Richard B. Cribbs, Covenant's executive vice president and chief financial officer, said he expects "favorable year-over-year comparison in freight revenue per tractor" during the current quarter.
"Our goal remains to deliver earnings improvement for the second half of 2017 as compared to the second half of 2016," Cribbs said.