Heartland Express Continues to Post Profit Improvement
Heartland Express Inc. reported another quarter of profit improvement despite a weakening freight environment and bad weather in the first quarter of 2019.
The North Liberty, Iowa-based dry van truckload carrier earned $17.3 million, or 21 cents a share, in the three months ended March 31, compared with net income of $13.4 million, or 16 cents a share, in the same period a year ago. Revenue fell 11% to $139.5 million from $156.7 million.
“Our operating revenue results during the first quarter were challenged by severe weather over multiple weeks, which included safety shutdowns for our drivers and impacted customer operations and shipping patterns,” Heartland Express CEO Michael Gerdin said in a statement issued April 18. “In addition, we experienced general softness in the overall freight environment as customer demand to date in 2019 has been less than over the same period of 2018.
However, Gerdin said, the company had success in recruiting drivers and finished the quarter with “organic growth” compared with the quarter ended Dec. 31.
The company also continued to refresh its fleet of tractors and trailers, and upgraded several terminal locations while increasing its cash balances and remaining debt-free.
Heartland Express’ profits took a hit after its purchase of Interstate Distributing Co. in July 2017. Based in Tacoma, Wash., IDC was not nearly as profitable and took Heartland Express out of its comfort zone by adding refrigerated, intermodal and brokerage services to its traditional regional dry van truckload business model.
IDC’s operations have since been fully integrated into the Heartland Express platform and culture, and intermodal and brokerage services were terminated.
As a result, Heartland Express’ operating ratio, a key measure of profitability in trucking that measures expenses as a share of revenue, has improved steadily over the past year, declining from 91.7 in the first quarter of 2018 to 79.9 in the fourth quarter.
In the first quarter of 2019, Heartland Express said its operating ratio was 85.1.
Heartland Express ranks No. 53 on the Transport Topics Top 100 list of largest for-hire carriers in North America.