Chattanooga, TN-based truckload carrier Covenant Transport said profits topped $4.7 million on revenues of $151.9 million in the third quarter, an increase of 17% and 4%, respectively, compared to the third quarter of 2003. Freight revenue, however, stagnated, holding at $140.6 million in the third quarter this year compared to $140.3 million in the third quarter of 2003.
For the first nine months of 2004, net income $9.9 million on revenues of $439.4 million, an increase of 22% and 2%, respectively, compared to the same period in 2003.
“We have been executing a strategy based on constraining our fleet size and improving our asset productivity, with the goal of returning to an operating ratio of below 90%,” said David Parker, the carrier’s chairman, president & CEO. “For the third quarter, our operating ratio was 92.7%- the first time it has been under 93% since the fourth quarter of 1999. This also reflects an improvement of 130 basis points over the 94% operating ratio we posted in the third quarter of 2003.”
Parker added that Covenant’s operating results reflected a good freight environment for most of the third quarter, despite high fuel prices and tough competition for drivers.
“Our business mix reflected a continuation of our trend toward a shorter length of haul and more dedicated routes as we allocate our capacity toward more productive customers and lanes,” he noted. “We are maintaining our historical focus on a substantial transcontinental team operation, but we are shifting a meaningful portion of medium length of haul movements toward shorter lengths of haul. Overall, we believe this shift has been a major factor in the improvements in Covenant’s profitability over the past several quarters.”