Covenant Logistics Group reported first-quarter 2026 revenue of $307.2 million, up 14.0% from $269.4 million a year earlier, as freight revenue excluding fuel surcharge rose 15.9% to $281.9 million from $243.2 million.
Net income fell to $4.4 million, down from $6.6 million in the first quarter of 2025, and earnings per diluted share declined to $0.17 from $0.24. Adjusted earnings per diluted share was $0.26, down from $0.32.
Operating income slipped to $6.3 million from $7.6 million, while adjusted operating income decreased to $9.6 million from $10.9 million. The company’s operating ratio worsened to 98.0% from 97.2%, and its adjusted operating ratio moved to 96.6% from 95.5%.
Truckload revenue was essentially flat at $188.1 million, compared with $188.3 million a year ago, but the mix shifted sharply between the company’s two main truckload businesses. Expedited freight revenue fell 10.3% to $71.9 million from $80.2 million, while dedicated freight revenue climbed 10.9% to $91.1 million from $82.1 million.
In expedited truckload, segment operating income dropped to $2.8 million from $5.6 million, and adjusted segment operating income fell to $0.7 million from $4.7 million. Expedited’s segment operating ratio weakened to 96.7% from 94.1%, while the adjusted segment operating ratio moved to 99.1% from 94.2%.
Dedicated truckload posted a much stronger quarter. Segment operating income rose to $5.6 million from $2.1 million, and adjusted segment operating income increased to $4.1 million from $1.6 million. Dedicated’s segment operating ratio improved to 94.6% from 97.7%, and its adjusted segment operating ratio improved to 95.5% from 98.1%.
The dedicated fleet also grew modestly. Weighted average tractors increased to 1,510 from 1,479, while average freight revenue per tractor per week rose 8.7% to $4,691 from $4,316. Average freight revenue per total mile improved to $3.45 from $3.10.
By contrast, the expedited fleet shrank. Weighted average tractors fell to 764 from 852, and average miles per tractor dropped to 42,772 from 44,260. Average freight revenue per tractor per week was nearly unchanged at $7,327 versus $7,323, while average freight revenue per total mile rose to $2.20 from $2.13.
Managed freight was the fastest-growing segment by revenue. Freight revenue surged 59.6% to $90.7 million from $56.9 million. Segment operating income edged up to $3.7 million from $3.5 million, and adjusted segment operating income increased to $3.6 million from $3.3 million. The segment operating ratio worsened to 95.9% from 93.8%, and the adjusted segment operating ratio moved to 96.0% from 94.1%.
Warehousing revenue increased to $27.6 million from $24.0 million, up $3.5 million year over year. Segment operating income slipped to $1.8 million from $1.8 million, and adjusted segment operating income fell to $1.2 million from $1.3 million. Warehousing’s segment operating ratio weakened to 93.6% from 92.4%, and its adjusted segment operating ratio moved to 95.6% from 94.6%.
On the balance sheet, net indebtedness declined by $51.0 million from year-end 2025 to about $245.3 million. Net indebtedness as a share of total capitalization improved to 37.6% from 42.3%. Cash and cash equivalents totaled $11.2 million at quarter-end, while the company had $29.0 million of borrowings under its ABL facility and $57.5 million of immediate available borrowing capacity.
The company also reported $1.6 million of assets held for sale at quarter-end. Average tractor age increased to 26 months from 20 months a year earlier. Covenant said 2026 net capital equipment expenditures are expected to range from $40 million to $50 million, down sharply from 2025. The market has reacted to these announcements by moving the company's shares -0.84% to a price of $27.12. For more information, read the company's full 8-K submission here.
