Covenant Transport missed analyst expectations in the fourth quarter with a loss of $2.2 million, or 15 cents per share, compared to a $700,000 profit in the fourth quarter of 2010.
David Parker, chairman, president and CEO of Covenant, chalked the loss up to fewer miles per truck and higher wage and maintenance expenses than the prior year.
Analysts had expected an 8-cent-per-share loss for the quarter, but Covenant's revenue decreased by 1.2 percent to $162 million, with freight revenue decreasing 6.7 percent, according to a news release.
For the full year, Covenant boosted revenues by 0.4 percent to $652.6 million, even as freight revenue decreased 6.3 percent to $512 million. In total, Covenant reported Wednesday that it lost $14.3 million during the year, or 97 cents per share, compared to net income of $3.3 million, or 23 cents per share, in 2010.
"We experienced pressure on expenses in several areas," Parker said in a news release outlining the quarterly results.
Wages increased by 3.8 cents per mile, while freight revenues decreased by $6.7 million, due in part to a 7.1 percent drop in miles per tractor, he said.
"The effect of lower revenue and increased costs unfavorably impacted our asset-based operating ratio, which rose approximately 360 basis points to 99.3 percent," Parker said in a statement.
Though fuel was 73 cents per gallon more expensive than in 2010, the company worked to manage truck speeds and idle time, and was able to improve fuel economy by 2.2 cents per mile, he said.
Covenant also increased revenue per mile during the quarter to offset decreased total mileage, driving up revenue per mile during the quarter by 8.6 cents.
Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...