Covenant Logistics Group reported third-quarter 2026 revenue of $353.89 million, up 19.2% year over year and $13.83 million above market expectations. Earnings per share were $0.50, beating estimates by 7 cents. On an October 30 earnings call, management said it was using firmer freight-market conditions to reshape the business mix and add multi-year committed-capacity contracts, aiming for greater long-term operating stability.
Expedited shifts to multi-year capacity agreements
Chief Financial Officer James Grant said Covenant converted expiring one-way truckload contracts in its Expedited business into multi-year committed-capacity arrangements with both new and existing customers. The agreements are intended to secure customer demand over a longer period. The earnings information provided did not specify the contracts' total capacity or their expected contribution to future revenue.
Dedicated expands pipeline and exits weaker business
Covenant has added multi-year trucking projects to its Dedicated pipeline while leaving businesses that have historically lost money or delivered lower margins. It has also launched projects with new customers. Management described the moves as part of an effort to improve business quality and make operations more stable over time, but did not disclose how many operations were exited, the associated costs or revenue from the new projects.
Managed Freight posts revenue and margin growth
Grant also said revenue and margins increased in the Managed Freight business. The available call details ended during this update, leaving the size of the gains undisclosed. Covenant did not provide a detailed breakdown of each business segment's contribution to third-quarter results.
Chief Executive Officer and Chairman David Parker, President M. Bunn and Chief Operating Officer Dustin Koehl also took part in the earnings call. Covenant cautioned that forward-looking statements are subject to risks and uncertainties and that actual results could differ materially from expectations. It directed investors to its filings with the U.S. Securities and Exchange Commission for information about relevant risk factors. The reported results show revenue and EPS both ahead of expectations, while management focused on longer-term customer agreements and selective business exits as it adjusts the company's operating mix.