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March 27, 2008 3:50 PM, EDT

Covenant Projects 1Q Loss Due to High Fuel Costs

Truckload carrier Covenant Transportation Group said Thursday it will lose 40 cents to 50 cents per share in the first quarter, citing soaring diesel fuel prices.

The company said it may boost fuel surcharges and freight rates in the coming quarter to cope with soaring diesel prices, which have risen more than 70 cents a gallon over the past six weeks.

“With continued cost pressures related to fuel, we will be working with our customers over the next few quarters with the intent of recovering an additional portion of the added fuel costs through additional fuel surcharge recovery or increased freight rates,” said Chief Operating Officer Joey Hogan.

“The shortfall versus our expectations is attributable to the unprecedented run-up in the cost of diesel fuel, which more than overcame improvements in miles-per-truck and cost-control efforts,” Covenant’s Chief Executive Officer David Parker said in a statement.

Covenant is ranked No. 38 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.