Key Highlights

  • Total Revenue in the third quarter climbed to $353.9 million from $296.9 million.
  • EPS came in at $0.40, versus $0.35, while adjusted EPS was $0.50, versus $0.44.
  • The operating ratio improved to 96.5% from 97.3%.
  • Operating income rose to $12.5 million from $7.9 million.
  • The 49% stake in TEL contributed $5.7 million of pre-tax income.

Revenue and EPS climb in the third quarter

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

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

Chairman and CEO David Parker said this marked the first time since the second quarter of 2022 that adjusted EPS rose both sequentially and year over year.

Operating ratio improves, but nine-month profit slips

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

Over nine months, total revenue rose to $993.9 million from $869.1 million, but EPS fell to $0.89 from $0.94, and adjusted EPS dropped to $1.18 from $1.22. Nine-month net income was $23.7 million, compared with $25.5 million.

The spread between the reported and adjusted operating ratios, along with the nine-month decline, suggests cost pressure has not fully eased.

Truckload segment and cost inflation

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

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

The company is shifting Assets toward customers who want long-term capacity and are 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 $5.7 million TEL contribution equals roughly 46% of third quarter operating income of $12.5 million, so the Equity Investment accounts for a meaningful share of the profit picture.

TEL stake and the dedicated contract goal

Covenant's 49% equity method investment in Transport Enterprise Leasing beat expectations for a second straight quarter, adding pre-tax net income of $5.7 million, or $0.16 per share, versus $3.6 million, or $0.10. The company said TEL gained from growth in equipment leasing and stronger 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 plans to stay disciplined and patient in pursuing customers and markets.

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