Key Highlights

  • Third quarter total Revenue rose to $353.9 million from $296.9 million.
  • EPS was $0.40, versus $0.35, and adjusted EPS was $0.50, versus $0.44.
  • Operating ratio improved to 96.5% from 97.3%.
  • Operating income was $12.5 million, up from $7.9 million.
  • The 49% Investment in TEL contributed $5.7 million of pre-tax income.

Revenue and EPS rise in the third quarter

Covenant Logistics Group (NYSE:CVLG), a Chattanooga, Tennessee transportation company with truckload and managed freight segments, reported third quarter 2026 results on October 29, 2026. Total revenue was $353.9 million, compared with $296.9 million, and freight revenue excluding fuel Surcharge was $315.1 million, up from $268.8 million.

Net income was $10.7 million versus $9.1 million, and EPS was $0.40 versus $0.35. Adjusted Net Income was $13.2 million versus $11.5 million, and adjusted EPS was $0.50 versus $0.44.

Chairman and CEO David Parker said it was the first time since the second quarter of 2022 that adjusted EPS increased both sequentially and year over year.

Operating ratio improves, but nine-month profit is lower

Operating income was $12.5 million versus $7.9 million, and the operating ratio was 96.5% versus 97.3%. On an adjusted basis, Operating Income was $15.8 million versus $15.0 million, while the adjusted operating ratio was 95.0% versus 94.4%.

For the nine months, total revenue was $993.9 million, up from $869.1 million, but EPS was $0.89 against $0.94 and adjusted EPS was $1.18 against $1.22. Nine-month net income was $23.7 million compared with $25.5 million.

The gap between the reported and adjusted operating ratios, together with the nine-month decline, shows that cost pressure has not fully eased.

Truckload segment and cost inflation

Combined Truckload revenue was $204.6 million versus $199.7 million, though freight revenue excluding fuel surcharge slipped to $166.0 million from $171.8 million. Segment operating income was $14.3 million versus $9.2 million.

Mr. Parker said freight Demand is adequate in most sectors and strong in specific sectors aligned with U.S. economic growth. Driver capacity is tight, and the cost of recruiting, retaining and compensating drivers is rising significantly, with cost Inflation weighing on nearly every major line item.

The company is reallocating Assets to customers seeking long-term capacity and willing to offer a reasonable return on its investments in drivers, equipment and technology.

Growth rates on a calculated basis

Total revenue grew about 19.2% and freight revenue about 17.2% year over year, while operating income rose about 58% and adjusted EPS about 14%. Nine-month total revenue grew about 14.4%.

The TEL contribution of $5.7 million equals roughly 46% of third quarter operating income of $12.5 million, so the Equity investment carries a meaningful share of the profit picture.

TEL investment and the dedicated-contract goal

Covenant's 49% equity method investment in Transport Enterprise Leasing exceeded expectations for a second straight quarter, contributing pre-tax net income of $5.7 million, or $0.16 per share, compared with $3.6 million, or $0.10. The company said TEL benefited from equipment leasing growth and higher equipment sale results.

Mr. Parker said the goal is to place substantially all asset-based Business under long-term dedicated or other committed contracts by the end of this freight market upcycle, and that the company intends to stay disciplined and patient in pursuing customers and markets.

A conference call was set for 10:00 a.m. Eastern Time on October 30, 2026.