Earnings Watch: Covenant Profit Plunges 62%, Landstar Slips 7.6%

Profit for the Tennessee-based parent to Covenant Transport plummeted in the third quarter, while Landstar System Inc. (NASDAQ: LSTR) recorded only a 7.6% decline, according to numbers released late Wednesday afternoon.

Covenant Transportation Group Inc. (NASDAQ: CVTI) saw net income fall 62% to $2.9 million, or 16 cents per share, compared with net income of $7.6 million, or 42 cents per share, in the third quarter of 2015.

Total revenue was $164.5 million, 5.2% less than in the third quarter of 2015, while freight revenue of $148.2 million dropped 3.4%. Both earnings and revenue were below market expectations. Operating income totaled $5.4 million compared with $14.6 million a year earlier.

The company had warned just a few days earlier that its earnings would be down significantly.

“The trucking environment in the third quarter was characterized by moderate freight volumes, and a depressed market for used tractors," said Chairman and CEO David R. Parker. "To combat these forces, we are taking steps to modestly reduce certain portions of our fleet, conserve capital expenditures [and] emphasize driver retention.”

Covenant is addressing the used equipment market by accelerating the depreciation rate on most of its tractors, and is in the process of “enhancing the management personnel and processes to improve the efficiency of its financially troubled refrigerated service offering, Southern Refrigerated Transport.”

Among the factors that pulled Covenant profit lower were depreciation increasing $4.6 million, or 15 cents per share; and casualty insurance and claims expense increasing $1.7 million, or 6 cents per share. Average freight revenue per tractor dropped 1.2%, lowering profit by approximately $1 million, or 4 cents per share, according to the company

“For the quarter, total revenue in our asset‑based operations decreased to $148.6 million, a decrease of $11 million compared with the third quarter of 2015,” Parker said. “The $7.3 million decrease in freight revenue ...Read the rest of this story

Magellan Rolls Out Trio of Fleet Management Solutions

GPS navigation vendor Magellan has rolled out three fleet management solutions, including a ruggen navigation device, Hours of Service compliance solution, and routing solution aimed at municipal fleets.

The company demonstrated the products at the Fleet Technology Expo in Schaumburg, Ill. from Oct. 17 to 19. The conference is produced by Bobit Business Media.

Magellan showed the RC9665 7-inch, IP67 ruggedized navigation device for truck and municipal fleet vehicles, HOS Compliance, and Return to Route.

HOS Compliance is an FMCSA-certified, ELD-compliant Hour of Service (HOS) solution integrated with Magellan Fleet Navigators.

Return to Route is a smart routing solution that keeps drivers of municipal fleet vehicles on track, on time and never missing a stop, according to the company. Return to Route is ideal for sanitation, snowplow, street sweeping and school bus fleets.

"A main focus this year is to become the preferred value-added-solutions provider in the fleet space," said Mark Perini, vice president of Magellan's automotive business.

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Q&A: Daimler Trucks North America’s Kary Schaefer

Kary Schaefer Photo: Daimler Trucks North America

Early this year, Daimler Trucks North America named Kary Schaefer general manager, marketing and strategy. We spoke with her last month after Freightliner unveiled its next-generation Cascadia. The interview has been lightly edited for length and clarity.

HDT: What are the most exciting and unique things about the new Cascadia?

Schaefer: I think the Driver's Loft, the new updated interior that we've introduced; I really think that's a leap forward in our interior design and a big improvement in driver experience. We've got that Murphy bed configuration that's easy to set up and take down, and the interior noise level when you're driving the truck is outstanding. We've improved the storage, trim levels are really nice…. it's a great improvement in the driver's living space.

Fuel economy is my second one for you. Between aerodynamic improvements with our new aero packages and drivetrain development changes, we've improved the fuel economy by 8% over a model year '16 Cascadia Evolution, so it's another big leap forward for us in terms of fuel economy leadership. And the changes we made to the driveline, we've been able to introduce a super fine finish on transmission gears, so it can use low viscosity oil which reduces friction losses. And axle lubrication management — it reduced all of the churning loss of the ring gear as it goes through the oil. Then the Intelligent Powertrain Management. We've incorporated additional map data and extended the intervals for coasting, which also improves fuel economy. It's really impressive performance.

HDT: It's interesting that you brought up the interior first. One of your recent jobs at DTNA was leading the cab engineering department. We've seen a lot of attention in recent years to cab design in new trucks as a ...Read the rest of this story

Heavy Duty Fleets Honored for Sustainability and Efficiency at FTX

James Cade of Ruan Transportation Managment at the awards ceremony for the Heavy Duty Sustainability category. Photo: Jim Park

Several heavy duty fleets were recognized and six took the top honors for sustainability and efficiency at the 2016 Fleet Technology Expo at an Oct. 19 ceremony in Schaumburg, Ill.

The awards recognized fleets that have made significant contributions to environmental sustainability and fleet efficiencies in the heavy duty commercial vehicle industry.

Nominees for the awards used alternative fuels, new technologies, software and training to gain efficiency and maintain a level of sustainability.

James Cade of Ruan Transportation Management, John King of the City of Columbus, and Jeffery Bonnema of Ozinga Bros were all given the top honors for the Heavy Duty Sustainability award.

In the Heavy Duty Efficiency category, Richard Knight of Knight Waste Services, Myles Kuperus of Kuperus Trucking and Bobby Jones of Duquesne Light Company were the three award winners.

Now in its second year, the Fleet Technology Expo is an event hosted by Heavy Duty Trucking, Automotive Fleet and Green Fleet magazines for all fleet types, focusing on ways to improve operational efficiencies. The conference features educational sessions covering topics like telematics, alternative fuels equipment and strategies for streamlining fleet operations.

For more information, visit the FTX website.

Related: NHTSA Official Talks Autonomous Vehicles, Safety Tech at FTX

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