William B. Cassidy | Jan 31, 2011 12:40PM EST
Higher rates and better utilization of its equipment helped Covenant Transportation pull out of the red and post a profit for the fourth quarter and the year.
The Chattanooga, Tenn.-based company reported $700,000 in net income on $136.6 million in freight revenue, excluding fuel surcharges, in the fourth quarter.
That's a drop from $139 million in freight revenue in the third quarter but a slight gain in sales over the previous year, reflecting better utilization and higher rates.
Truckload rates were 5.2 percent higher in the fourth quarter than in the same period in 2009, the carrier said. Year-over-year, miles per truck dropped 2.1 percent.
For the full year, Covenant had a $3.3 million net profit, its first annual profit since 2005. Revenue before surcharges increased 5 percent to $546.3 million.
Covenant's total revenue including surcharges rose 3.9 percent to $163.9 million in the fourth quarter and 10.4 percent to $649.7 million for the full year.
For the fourth quarter, asset-based revenue increased 6.6 percent from a year ago, buoyed by a 3 percent increase in average revenue per truck per week.
Covenant returned to profitability in the second quarter of 2010 as a wave of inventory restocking filled trailers and lifted truck rates from recessionary lows.
The company had nine consecutive quarterly losses, losing $25 million in 2009, $53.4 million in 2008, $16.7 million in 2007 and $1.4 million in 2006.
The fourth quarter "marks the mid-point of a dramatic turnaround in Covenant's performance," said Chairman, President and CEO David R. Parker.
"I use the word midpoint to emphasize that much work remains to be done to achieve acceptable margins and returns on our investment," Parker said.
-- Contact William B. Cassidy at wcassidy@joc.com.