Covenant Transport’s 3Q Income Declines on Higher Costs

ovenant Transport said late Monday that its net income for the third quarter was $1.2 million or 9 cents a share, down from $3.7 million or 32 cents a year earlier.

The truckload carrier said in a statement that its revenue rose 12% to $169.9 million for the quarter.

Covenant’s operating costs were 11 cents a mile higher than the third quarter of 2004 and slightly over 1 cent per mile over the second quarter of 2005.

“Freight demand gained strength throughout the quarter, with September finishing quite strong,” said Chief Executive Officer David Parker.

“After two quarters of less-than-impressive asset utilization, we were able to increase our average freight revenue per tractor per week,” he said in a statement.

Parker said the new sleeper-berth regulations included in the Federal Motor Carrier Safety Administration driver hours-of-service rules “will have a neutral to moderately negative impact on the hours drivers otherwise could drive. This potentially could reduce mileage utilization in future periods.”

Parker said the carrier expects fuel costs to increase in the fourth quarter.

Covenant is ranked No. 36 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.