Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Covenant Logistics (NYSE: CVLG) and the best and worst performers in the ground transportation industry.
The growth of e-commerce and global trade continues to drive demand for shipping services, especially last-mile delivery, presenting opportunities for ground transportation companies. The industry continues to invest in data, analytics, and autonomous fleets to optimize efficiency and find the most cost-effective routes. Despite the essential services this industry provides, ground transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.
The 16 ground transportation stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
While some ground transportation stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.8% since the latest earnings results.
Covenant Logistics (NYSE: CVLG)
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ: CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.
Covenant Logistics reported revenues of $302.9 million, up 5.3% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ Freight revenue estimates and a solid beat of analysts’ adjusted operating income estimates.
Chairman and Chief Executive Officer, David R. Parker, commented: “We are pleased to report second quarter earnings of $0.36 per diluted share or $0.45 per diluted share on a non-GAAP adjusted basis.
Covenant Logistics scored the biggest analyst estimates beat of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $24.40.
Is now the time to buy Covenant Logistics? Access our full analysis of the earnings results here, it’s free.
Best Q2: Werner (NASDAQ: WERN)
Conducting business in over a 100 countries, Werner (NASDAQ: WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Werner reported revenues of $753.1 million, down 1% year on year, outperforming analysts’ expectations by 3%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The market seems content with the results as the stock is up 4.7% since reporting. It currently trades at $29.13.
Is now the time to buy Werner? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Heartland Express (NASDAQ: HTLD)
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Heartland Express reported revenues of $210.4 million, down 23.4% year on year, falling short of analysts’ expectations by 10.4%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Heartland Express delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 1.2% since the results and currently trades at $8.56.
Read our full analysis of Heartland Express’s results here.
Knight-Swift Transportation (NYSE: KNX)
Covering 1.6 billion loaded miles in 2023 alone, Knight-Swift Transportation (NYSE: KNX) offers less-than-truckload and full truckload delivery services.
Knight-Swift Transportation reported revenues of $1.86 billion, flat year on year. This print was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is down 3.1% since reporting and currently trades at $44.23.
Read our full, actionable report on Knight-Swift Transportation here, it’s free.
Ryder (NYSE: R)
As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.
Ryder reported revenues of $3.19 billion, flat year on year. This number surpassed analysts’ expectations by 0.8%. It was a very strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and full-year EPS guidance slightly topping analysts’ expectations.
The stock is up 8.4% since reporting and currently trades at $187.23.
Read our full, actionable report on Ryder here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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