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Heartland Express Inc. announced Jan. 23 that net income for the fourth quarter of 2019 declined while revenue increased.
The company’s Q4 net income fell 42.9%, to $12.8 million, compared with $22.4 million in Q4 2018. On a per-share basis, net income fell 40.7% to 16 cents, compared with 27 cents in Q4 2018.
However, Heartland Express said Q4 revenue rose 13.7% to $167.2 million, from $147 million in the fourth quarter of 2018.
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The North Liberty, Iowa-based company said its operating ratio was 89.4, compared to 79.9 in the year-ago period. Operating ratio is a measure of efficiency, comparing expenses to revenue. The lower the ratio, the more efficient a company has operated.
For the year, Heartland’s net income ticked up 0.4% to $73 million, or 89 cents per share, compared with $72.7 million, or 88 cents, in 2018. Full-year revenue fell 2.3% to $596.8 million from $610.8 million in 2018.
Heartland CEO Michael Gerdin noted in the earnings release that his company’s operating revenues were boosted by the acquisition of Millis Transfer, a Wisconsin-based dry van truckload carrier Heartland acquired in August for about $150 million. He also noted that the company was debt-free after the Millis acquisition as well as its purchase of Interstate Distributor in 2017.
Gerdin noted that the last two years have shared characteristics with other volatile yet dynamic times in the company’s 40-year history.
“The year of 2018 provided strong demand for freight and elevated freight rates that allowed our industry to increase driver wages and many companies to thrive,” said Gerdin. “In contrast, 2019 provided freight demand which was significantly weaker than the prior year where pricing pressures were the norm and many of our peers were forced to lower freight rates, make short-term reactionary decisions, and some even closed their doors for good.”
Gerdin said Heartland Express tries to manage industry swings with a long-term vision.
“We do not operate based on the short-term mindset,” Gerdin said. “Our operating model is built on the long-term foundations that have stayed true for us in good operating environments and bad, and have allowed us to deliver efficient and consistent operating results.”
Heartland Express ranks No. 57 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
At the end of 2019, the company reported cash on hand of $76.7 million. Its fleet average age of tractors was 1.8 years, and its fleet average age of trailers was 3.6 years.
Heartland Express is an irregular-route truckload carrier that focuses on medium- to shorthaul regional freight, serving customers with shipping lanes throughout the United States. The company had about 2,900 company-owned tractors and 10,500 trailers in 2019.
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