Heartland Express reported lower revenue but higher profits in the fourth quarter of 2018 as the company continues a program to shrink its fleet and re-establish itself as one of the nation’s most efficient truck operators.
The North Liberty, Iowa-based company earned $22.7 million, or 27 cents a share, in the three months ended Dec. 31, and posted an operating ratio below 80 for the first time in many years.
“Our results reflect continued and significant financial improvement each quarter throughout 2018,” said CEO Michael Gerdin in a statement on Jan. 22.
Over the course of 2018, Heartland’s operating ratio, which is a measure of efficiency that measures operating expenses as a percentage of revenue, has declined from 91.7 in the first quarter to 79.9 in the fourth quarter.
I am pleased with our drivers, our team that supports our drivers, and our financial results for 2018.
— CEO Michael Gerdin
Net income rose from $13.4 million in the first quarter to $22.4 million in fourth quarter and cash balances rose from $105 million to $161.4 million, the company reported.
“During these same periods we maintained our discipline by carrying no debt on our balance sheet, right-sized our fleet, controlled costs and focused on freight rate improvements to help our bottom line,” Gerdin stated.
Heartland reported net income of $38.6 million, or 46 cents a share, but those results included a one-time tax benefit of $32.6 million due to passage of the Tax Cuts and Jobs Act of 2017. Heartland’s income before taxes was $30.3 million in the fourth quarter of 2018, compared with $10 million in the same period in 2017.
Heartland saw its profits fall precipitously following its acquisition of Interstate Distributor Co. in July 2017. Since then, the company stopped offering intermodal and brokerage services and withdrew service from accounts inherited from IDC that were not as profitable as Heartland’s legacy business.
Those actions led to an 11.3% drop in revenue to $147 million in the fourth quarter of 2018 compared with $165.7 million in the same period a year earlier.
For the year, Heartland posted net income of $72.7 million, or 88 cents a share, on revenue of $610.8 million. That compares with net income of $75.2 million, or 90 cents a share, on revenue of $607.3 million in 2017.
Gerdin said the company has continued to update its fleet of tractors and trailers along with terminal facilities to enhance services for its drivers, while remaining focused on improving the company’s bottom line.
“I am pleased with our drivers, our team that supports our drivers, and our financial results for 2018,” Gerdin said. “We believe we are properly positioned to navigate the exciting road ahead.”