Business & Investment

Covenant sees “demand firing on all cylinders”

Covenant Logistics Group (NASDAQ: CVLGAfter Wednesday’s closing price, adjusted second-quarter earnings per share were 96 cents, above the consensus forecast of 67 cents per share. Adjusted net income was $ 16.3 million, compared to just north of $ 400,000 in the year-ago quarter.

Quarterly results were the best in the company’s history.

“In the second quarter, there was demand in the freight market for all cylinders as a result of increased economic activity, inventory declines and supply chain disruptions, and supply restrictions due to a growing shortage of drivers in the country. “It was,” said Chairman and Chairman David Parker. CEO, in a press release. “These situations continue until the third quarter.”

Combined truck loading by Tennessee-based carriers, Chattanooga saw weekly revenue per tractor increase by 24.8% to $ 4,551, partly due to a decrease in average tractor numbers of 2,451. Revenues excluding fuel surcharges increased 8.5% year-on-year as they were offset. The increase in revenue per tractor was due to a 10.1% increase in revenue per mile loaded excluding fuel ($ 2.24) and a 13.9% increase in miles per tractor.

The year-over-year comparison is compared to the second quarter of 2020 and is heavily impacted by the COVID protocol and widespread shutdown.

Fleet reduction is part of the company’s commitment to focus on dedicated, rapid service, focusing on unprofitable operations such as terminated stand-alone refrigeration and one-way irregular routes. ..

The TL segment recorded an adjusted occupancy rate of 92.7%, an improvement of 730 basis points over the previous year. The salary, wage and benefits lines decreased by 450 bps as a percentage of revenue, but rent and purchased transportation costs increased by 490 bps as charges rose while capacity remained very tight.

“We are happy with these results, but we are aware of opportunities for further improvement, especially in the dedicated segment,” Parker added. “This means, in the short term, we will continue to improve our rates and terms and conditions with customers who are not making the constant profits we expect from this business segment, and in the long term we will improve our margins. It means taking responsibility for. We are profitable in every aspect of our business. “

Covenant’s dedicated segment, operating with marginal operating profit, recorded an adjusted OR of 99.4%, an improvement of 190bps year-on-year.

The company will call Thursday at 10 am to discuss the results of the second quarter with analysts.

Click here to see more Freight Waves articles by Todd Maiden.

Covenant sees “demand firing on all cylinders” Covenant sees “demand firing on all cylinders”

Back to top button