Covenant Logistics Group Faces Headwinds in Weak Freight Market, Remains Resilient

Covenant Logistics Group Faces Headwinds in Weak Freight Market, Remains Resilient

Covenant Logistics Group, headquartered in Chattanooga, Tennessee, revealed that its third-quarter performance felt the weight of a sluggish freight market, but the company remains confident in its “resilient operating model.”

In the third quarter, Covenant (NASDAQ: CVLG) reported adjusted earnings per share of $1.13, just one cent below the consensus estimate. Third-quarter revenue amounted to $288.7 million, falling short of analysts’ predictions of $293 million for the period. Total revenue for the quarter experienced a 7.4% year-over-year decline, with earnings per share dropping by 26% in the same period. The company’s total freight revenue decreased by 5% year-over-year to reach $253.3 million, while freight revenue per tractor per week witnessed a 3.9% increase, reaching $5,677. The expedited truckload segment revenue managed a 0.1% increase, hitting $91.6 million, while the dedicated segment revenue saw a decline of 10.5%, settling at $66.9 million.

Covenant’s managed freight segment reported third-quarter revenue of $69.7 million, marking an 11% decrease from the previous year. In contrast, the warehousing segment reported revenue of $25 million during the quarter, showing a robust year-over-year increase of 14.8%.

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