Chattanooga-based Covenant boosts 4th quarter earnings

Chattanooga-based Covenant boosts 4th quarter earnings

January 29th, 2014 by Staff Report in Business Around the Region

Covenant Transport is based southwest of downtown Chattanooga next to Interstate 24.

Photo by John Rawlston /Times Free Press.

Covenant Transportation Group doubled its fourth quarter earnings to beat analysts expectations at the end of last year.

But the Chattanooga-based trucking giant still earned slightly less in 2013 than in the previous year.

Covenant earned $3.3 million in net income, or 22 cents per share, in the three months ended Dec. 31. A year ago, fourth quarter profits totaled only $1.5 million, or 10 cents per share. The consensus forecast for Covenant earnings in the fourth quarter was 20 cents per share.

"It was an incredible quarter from a profit standpoint," Covenant Chief Financial Officer Joey Hogan said Tuesday in a conference call with industry analysts.

For all of 2013, Covenant earned $5.2 million, or 35 cents per share, on revenues of $684.5 million. In the same period a year ago, Covenant earned $6.1 million, or 41 cents per share, on revenues of $674.3 million.

Covenant CEO David Parker said results "were favorable" as average freight revenue per tractor per week increased to $3,568 in the final quarter of 2013, up from $3,490 in the same period a year earlier.

"We experienced cost pressure in several areas," Parker said in a statement. "Salaries, wages and related expenses increased approximately 0.7 cents per mile due to employee pay adjustments since the fourth quarter of 2012, partially offset by lower workers' compensation expense."

But Parker said higher costs were partially offset by an overall reduction in fuel and insurance costs, aided by new and more fuel-efficient trucks.