Covenant Logistics Reports Nearly 5% Revenue Rise for Q2
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Covenant Logistics Group experienced an increase in revenue but a slight decline in earnings during the second quarter of 2024, the company reported July 24.
The Chattanooga, Tenn.-based truckload and expedited carrier posted net income of $12.2 million, or 88 cents a diluted share, for the three months ending June 30. That compared with $12.3 million, 91 cents, during the same time the previous year. Revenue increased by 4.9% to $287.5 million from $274 million.
“We are pleased to report second-quarter earnings of $0.88 per diluted share and non-GAAP adjusted earnings of $1.04 per diluted share,” Covenant CEO David Parker said. “Highlights of our second quarter’s results include year-over-year freight revenue growth of 5.3% and adjusted operating income growth of 15%, further demonstrating the value proposition of our diversified logistics services in the midst of a freight environment that has remained challenged.”
Covenant Logistics ranks No. 40 on the Transport Topics Top 100 list of the largest for-hire companies in North America as well as No. 2 on the air/expedited list and No. 26 on the truckload/dedicated list. And it ranks No. 76 on the TT Top 100 list of the largest logistics companies in North America.
“Our team has worked hard to navigate through the prolonged down cycle by capitalizing on new value-added commercial opportunities where available, allocating equipment investments toward more profitable operations and controlling costs,” Parker said. “Our 49% equity method investment with Transport Enterprise Leasing contributed pretax net income of $4.1 million, or $0.23 per share, compared to $5.4 million, or $0.29 per share, in the 2023 quarter.”
The combined truckload business reported revenue increased 8.7% to $201.5 million from $185.2 million during the prior-year quarter. The increase consisted of more freight and fuel surcharge revenue. The increase in freight revenue primarily related to the company operating 9.1% more tractors on average and an improvement in freight revenue per total mile. This was partially offset by a reduction in utilization compared to the prior year. Operating income increased 12.8% to $10.2 million from $9.06 million. The segment includes expedited and dedicated truckload operations.
Expedited segment revenue increased 3.8% to $108 million from $104.1 million. But operating income decreased 18% to $4.77 million from $5.82 million.
Dedicated revenue increased 15% to $93.5 million from $81.2 million. Operating income also increased 68% to $5.45 million from $3.24 million.
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Managed freight segment revenue decreased 4.6% to $60.4 million from $63.3 million. Operating income improved 71.2% to $3.33 million from $1.95 million. The report noted that operating income improved primarily as a result of improved purchased transportation costs, a reduction in cargo-related claims and acquisition costs.
Warehousing segment revenue increased 0.7% to $25.4 million from $25.2 million. Operating income jumped 160% to $2.03 million from $780,000. The increase in earnings was a result of improvements to direct labor costs and the year-over-year impact of customer rate increases.
