Covenant Logistics Group reported weaker-than-expected earnings in the first quarter of 2026 as severe winter weather and higher fuel costs weighed on performance, although improving transportation trends in March point to a possible rebound.
The Chattanooga, Tennessee-based trucking freight and logistics provider posted net income of $4.4 million, or 17 cents per diluted share, down from $6.6 million, or 24 cents per share, a year earlier.
Adjusted earnings per share were $0.26, compared to $0.32 in the prior-year period.
CEO David Parker said the quarter “did not meet expectations,” citing disruptions in January and February, but noted an improvement in freight volumes and pricing toward the end of the quarter.
“Our positive operating performance and momentum carried into the second quarter” includes a growing pipeline of new customers and rate increases with select carriers, Parker said in a news release.
The company’s revenue beat first-quarter revenue estimates of $307.2 million, but earnings per share of $0.26 missed the forecast of $0.30.
Covenant Logistics Group (NYSE: CVLG) reported first-quarter results after the market closed Thursday. The airline will hold a conference call to discuss the results with analysts on Friday at 10 a.m. Covenant offers full-load, express, and dedicated logistics services throughout the US.
Total revenue increased 14% year over year to $307.2 million, driven by a 15.9% increase in transportation revenue, excluding fuel surcharges.
Despite revenue growth, profitability weakened. Operating income decreased to $6.3 million from $7.6 million, while the operating ratio deteriorated to 98.0% from 97.2%, reflecting higher costs.
Fuel expenses, inflationary pressures and higher purchased transportation costs weighed on margins, along with weather-related disruptions early in the quarter.
Covenant’s business segments showed divergent trends:
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Dedicated truck loading was a bright spot, with revenue increasing 10.9% to $91.1 million and operating income more than doubling, supported by increased fleet productivity.
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Expedited truck loading Revenue fell 10.3% to $71.9 million as tractor numbers and unit miles declined.
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Managed load rose 59.6% to $90.7 million, largely due to acquisitions completed in late 2025, although margins compressed due to higher capacity costs.
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storage Revenue rose 14.6% to $27.6 million, driven by the addition of new customers, but startup costs limited profit growth.
Total truckload revenue was essentially flat year over year at $188.1 million.
Operationally, Covenant saw an improvement in pricing metrics despite softer utilization: