As previously reported, Stephens analyst Brad Delco downgraded Covenant Transportation (CVTI) to Equal Weight from Overweight on valuation. While the analyst is encouraged by the improvement in Truckload fundamentals, a challenged pricing environment from last year's bid season, combined with a weak used truck market and higher fuel costs should serve as earnings overhangs for the group this quarter. He also downgraded Knight Transportation (KNX) to Equal Weight from Overweight.

Reports Q1 revenue $1.82B, consensus $1.82B. CEO Adam Miller commented, "The full truckload market remains extremely challenging as carriers navigate the oversupply of capacity, reduced load volumes, and continued rate pressure through the early part of the bid season. This has negatively impacted the results of our Truckload, Logistics, and Intermodal segments...Although our consolidated results are not where we would like them to be, we are confident that we have the resources and are capable of the disciplined approach necessary to navigate the current market...We are continuing our strategy of building a nationwide LTL network through both organic and inorganic growth paths. Our logistics segment will continue to complement our truckload brands, leverage our power-only capabilities, preserve profitability, and afford outsized growth opportunity when the truckload market strengthens. We are building a strong foundation of diverse customers in our intermodal business with strategic rail partners, which we believe will position us for sustained profitability in the future."