Covenant Transportation Group, Inc. (NASDAQ/GS: CVTI) reported on July 25 second quarter earnings of $0.08 per share, marking. That’s down 60% year over year, but according to analysis by Stifel, that result is “right in line with the Street consensus of $0.06.”

A Stifel post-earnings report on Covenant observed that while the company “saw some headwinds related to their dedicated operations, demand and revenue have been sequentially stronger each month, and we expect the company to have a larger boost from e-commerce in the 4Q this year than last year.”

“Freight demand built throughout the quarter and continues to be favorable in July on a seasonally adjusted basis,” Covenant Chairman and Chief Executive Officer David Parker said in a statement.

Parker noted that the company “assisted customers in our dedicated service offering to re-engineer improved efficiency of their freight network,” which cut the number of dedicated trucks they required. “The loss of volume led to a 2.8% year-over-year reduction in average miles per tractor for the month. Freight demand improved gradually in May as we replaced the lost freight with new high-quality freight. In June, capacity tightened resulting in a 0.5% year-over-year increase in average miles per tractor despite our Star subsidiary experiencing a 6% reduction due to automotive plant shutdowns in its network as automotive manufacturers managed new vehicle inventories. Consistent with the monthly improvement in utilization, we experienced sequential monthly growth in our average rate per total mile as we replaced the freight demand we had lost during April.”

Parker added that Covenant is now looking forward to “a more favorable supply-demand relationship in the second half of 2017 and beyond. From a cost perspective, our margins were pressured across nearly all fronts other than net fuel expense, as we continued to invest in our people, equipment, and technologies."

Covenant said highlights for Q2 included:

• Total revenue of $164.3 million, an increase of 3.5% compared with the second quarter of 2016

• Freight revenue of $145.6 million (excludes revenue from fuel surcharges), an increase of 0.8% compared with the second quarter of 2016

• Operating income of $4.0 million and an operating ratio of 97.3%, compared with operating income of $7.3 million and an operating ratio of 94.9% in the second quarter of 2016

• Net income of $1.5 million, or $0.08 per diluted share, compared with net income of $3.6 million, or $0.20 per diluted share in the second quarter of 2016

Chattanooga-based Covenant Transportation Group is the holding company for several transportation providers, including Covenant Transport and Covenant Transport Solutions of Chattanooga; Southern Refrigerated Transport of Texarkana, and Star Transportation of Nashville.