Truckload carrier Covenant Transport had $1.2-million worth of first-quarter earnings wiped out as it took a $900,000 charge to eliminate certain debts and a $2-million charge to cover the declining residual values of its tractor fleet.

For the quarter, freight revenue (before fuel and other surcharges) decreased 2% to $129 million, down from $131.3 million in the first quarter of 2001. Despite that revenue decline, net earnings jumped up to $1.2 million, compared to $229,000 in the first quarter of last year.

However, the $2-million tractor value charge and $900,000 debt elimination item forced Chattanooga, TN-based Covenant to report a net loss of $1.7 million.

President & CEO David Parker added that rising insurance costs is a growing problem. He said Covenant's insurance and claims expense was up 200 basis points as a percentage of revenue versus a year ago.