TL stocks take wild ride into, out of Q4 earnings season

Truckload stocks appeared priced for perfection heading into the fourth-quarter earnings season. Shares ran more than 40% higher from the week before Thanksgiving to mid-January, when J.B. Hunt Transport Services reported. The move was in lockstep with rising tender rejections and spot rates. Earnings misses and lackluster outlooks were set to be punished until a surprisingly positive manufacturing update provided the group another shot in the arm. However, that bump was partially dashed by a tiny tech company touting plans to disintermediate the space.

Carriers reported decent peak-season demand, underscoring supply-side tightening from increased regulation of the driver pool. Winter storms in December further stretched the dynamic. However, improving fundamentals came late in the quarter, leaving the period more indicative of the prolonged downturn. While the space appears on the verge of an upswing, management teams were unwilling to bake a recovery scenario into their 2026 outlooks.

Following the 40% runup into earnings season (the S&P 500 was up only 6% over that stretch) shares moved sideways after the first couple of reports. However, TL and less-than-truckload stocks jumped in the first week of February after January’s Purchasing Managers’ Index report showed life across the manufacturing complex for the first time in a year.

The group sold off following the Thursday release of a white paper from a largely unknown company, claiming its AI tools will significantly reshape freight brokerage and generate large savings for users. Algorhythm Holdings (NASDAQ: RIME), a firm with a sub-$10 million market cap and better known for its days as a seller of karaoke machines, said its formula has unlocked significant reductions in empty miles and headcount.

A version of its platform in India is coming to the U.S.

Industry participants and analysts largely panned the claims. The operation appears to require mass collaboration from shippers, carriers and 3PLs to achieve the stated synergies. That seems unlikely as most intermediaries have spent billions building siloed tech platforms to garner market share.

The news caused a mid-teen percentage selloff in 3PL stocks. It also dragged down shares of asset-based carriers by mid-single digits. Both groups were up low-single-digits in midday trading on Friday.

(The events positively and negatively skewed post-earnings stock reactions for some carriers.)

J.B. Hunt Transport Services (reported Jan. 15)

J.B. Hunt (NASDAQ: JBHT) delivered more positives than negatives in the fourth quarter. It again saw the fruits of a $100-million cost reduction program (80 basis points of operating margin). Adjusted operating income was up 11% year over year even as revenue dipped 2%.

It said it is taking market share but that the wins may have more to do with being aligned with winning customers than an overall lift in demand. It tamped down enthusiasm around an inflecting freight market—which analysts called “conservative”—noting too many head fakes in the past when trying to call this cycle. It also flagged a couple of headwinds—a $90-million hit to 2026 revenue from the loss a final-mile customer, and a delay in net fleet growth in its dedicated unit.

While it didn’t provide numbers around future cost elimination, it noted several additional opportunities. It also said work done at the brokerage unit has pushed operating costs down to 2018 levels, setting it up for a bigger pop in results in a recovery. (Brokerage gross margins were squeezed 490 bps as spot rates jumped to close the quarter.)

Shares of JBHT began to run in mid-October, ahead of most TLs, after belt tightening led to a big earnings beat in the third quarter.

Knight-Swift Transportation (reported Jan. 21)

Knight-Swift’s (NYSE: KNX) fourth-quarter adjusted earnings came in light of expectations (it reported a headline net loss) as operating margins eroded y/y across every business unit except intermodal. (Intermodal results improved but the unit still booked a slight operating loss.) Importantly, Knight-Swift’s first-quarter guidance was in line with consensus, and the company expects to achieve margin improvement in 2026 even if volumes and rates don’t improve.

It has removed $150 million in expenses from its TL business, $50 million of which were fixed and not expected to return as volumes come back. (The fixed cost reductions represent 120 bps of TL unit operating margin.) The variable cost takeouts (maintenance, fuel and insurance) will return in an upswing, but potentially not to the same magnitude once incurred. (These costs have moved lower as a percentage of revenue.)

Knight-Swift said a reduction in truck supply has tightened the market, noting network balance was trending ahead of normal seasonality through the first couple of weeks in January. But management wasn’t ready to say the market has finally turned.

It noted some shippers have begun moving freight to asset-based carriers in efforts to lockdown capacity. It’s currently targeting low- to mid-single-digit contractual rate increases (leaning toward the upper end) during the 2026 bid season. It also sees the potential for premium spot market opportunities, which haven’t been around in a while.

Marten Transport (reported Jan. 27)

Refrigerated carrier Marten (NASDAQ: MRTN) reported y/y declines in operating results, but saw some improvement sequentially. Revenue was down 9% y/y with adjusted operating income falling 31%. However, adjusted operating income improved 70% sequentially from the third quarter.

Gains on equipment sales were a tailwind both y/y (nearly 9 times higher) and sequentially (74% higher). However, “aggressive cost controls” were also credited for the improvement. Marten has been focused on improving tractor utilization. Both revenue per tractor and miles per tractor improved sequentially.

Marten’s consolidated OR was 80 bps worse y/y but 110 bps better sequentially. The TL OR improved 310 bps sequentially to 99.1% while its dedicated OR slid 60 bps to 94.6%.

Schneider National (reported Jan. 29)

Schneider’s (NYSE: SNDR) fourth-quarter and 2026 outlook came in below expectations, sending shares as much as 18% lower in the trading session following the report.

The company said “softer than expected market conditions” in November gave way to “material tightening in December” as severe weather gripped the Midwest. However, the late demand surge wasn’t enough to save the quarter. Its dedicated business also experienced some weakness from “unplanned auto production shutdowns.”

A jump in purchased transportation (TL spot rates) and weather-related costs to close the year, along with “heightened healthcare costs,” were the drivers behind the earnings shortfall.

A full-year 2026 adjusted EPS guide of 70 cents to $1.00 came in below the $1.07 consensus estimate at the time of the print. Management noted “some conservatism” at the low end of the range, but said it wasn’t ready to underwrite a meaningful recovery in the new year.

Schneider increased a cost-reduction program. After realizing $40 million in cost takeouts last year, it plans to remove a similar amount in 2026, which would equate to 70 bps of consolidated operating margin improvement.

Covenant Logistics Group (reported Jan. 29)

Covenant (NYSE: CVLG) said heightened regulatory enforcement is pushing capacity from the market and that supply and demand may already be balanced. The company posted a modest miss on an adjusted basis (a large headline net loss) in the fourth quarter as the government shutdown, higher insurance claims and elevated capacity costs were an overhang.

The company has tightened plans around capital allocation, intentionally shrinking its fleet to improve truck utilization and margins. It is moving away from the generic, commoditized TL market, but will continue to look for opportunities to grow exposure to specialized dedicated freight.

Covenant said revenue trends across its businesses improved during the first three weeks of January. Low- to mid-single-digit contractual rate increases in its expedited offering should begin to have an impact on results in the first quarter.

Heartland Express (reported Feb. 3)

Heartland’s (NASDAQ: HTLD) fourth quarter marked 10 straight net losses, excluding one-time real estate gains. However, the company has logged sequential margin improvement in each of the past three quarters.

Heartland does not host a quarterly call, nor does it provide operating metrics around utilization and pricing.

The company pointed to some “positive signs” around customer volumes and rates. It said truck capacity is leaving the market, but that a recovery is unlikely to occur “until some months later in 2026.”

Werner Enterprises (reported Feb. 5)

Werner (NASDAQ: WERN) reported a net loss before adjustments. However, the bigger story was the company’s decision to restructure its one-way unit as it continues to build out its dedicated offering.

The move is expected to improve fleet utilization and return the unit to profitability. The fleet included nearly 3,300 tractors in 2022, but stood at less than 2,400 units at the end of 2025. In addition to the downsizing, Werner is moving assets into its more profitable one-way offerings like expedited, cross-border, and long-haul delivery using driver teams.

The announcement followed Werner’s acquisition of dedicated carrier FirstFleet at the end of January. The $283 million deal added over 2,400 tractors and $615 million to the top line. Werner is now the fifth-largest dedicated provider in the U.S.

The acquisition is immediately accretive to earnings but headwinds and costs from the one-way restructuring will likely be a drag on results in the first quarter. Even after the downsizing, Werner still expects to be able to play in an improving spot market.

More FreightWaves articles by Todd Maiden:

The post TL stocks take wild ride into, out of Q4 earnings season appeared first on FreightWaves.