● Watch Now


BusinessCompany EarningsFinanceNewsTrucking

Covenant Q2: Better OR in dedicated, worse in expedited

Net income down but not far from consensus projection

John Kingston
·
Covenant's earnings reflected the weak truckload market. (Photo: Jim Allen/FreightWaves)

There were some key points in the second-quarter earnings release of truckload carrier Covenant Logistics (NASDAQ: CVLG).

  • The dedicated division operating ratio was improved, the expedited OR was significantly weaker and the end result was a combined truckload OR that dropped 270 basis points compared to the second quarter of 2022.
  • In a weak freight market, the combined truckload average freight revenue per total mile declined just 5.3%.
  • The adjusted OR for the company was 93.3%, weakening from 89.4%.
  • Net income plummeted to $14.4 million from $25.6 million. Adjusted earnings per diluted share were $1.07, a non-GAAP measure, while earnings per diluted share were 91 cents. Seeking Alpha said the consensus forecast on earnings at Covenant this quarter was 95 cents per share. 
  • The total number of tractors for the period was significantly lower, declining to 2,103 overall from 2,371 a year ago.

The Covenant call with analysts is at 10 a.m. EDT Friday. Its stock has been a high flier, up 43.2% in just the last three months. 

More articles by John Kingston

Covenant buys poultry hauler and reports softer 1st quarter


Covenant Logistics announces leadership change

Aurora signs up truckload carrier Covenant to work on autonomous technology

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.