Heartland Express Returns to Profit as Operating Ratio Improves
The truckload carrier earned $0.14 a share after losing $0.06 a share in the first quarter.
Heartland Express Inc. (HTLD), the truckload carrier, returned to a second-quarter profit as stronger freight volumes, improved customer pricing and capacity reductions helped lift results from the prior quarter.
Revenue rose 4.4% sequentially to $184.1 million but fell 12.5% from a year earlier. Net income totaled $10.6 million, reversing losses of $4.8 million in the first quarter and $10.9 million a year earlier.
The adjusted operating ratio improved to 88.3% from 101.3% in the first quarter, extending a five-quarter improvement from 106.0% a year earlier. The reported operating ratio fell to 91.0% from 101.9% sequentially and 105.9% a year earlier.
Fuel surcharges accounted for part of the revenue movement. Fuel-surcharge revenue increased to $31.7 million from $24.5 million a year earlier, while revenue excluding those charges fell 18.0% to $152.4 million.
Equipment sales also contributed materially to the profit swing. Gains on equipment disposals rose to $25.1 million from $2.8 million a year earlier, while operating income improved to $16.5 million from a $12.4 million loss. Adjusted operating income was $17.8 million, compared with an $11.2 million loss.
Heartland reduced acquisition-related debt by $15.0 million during the quarter to $134.9 million, while cash increased to $62.4 million from $44.5 million at the end of March. The company repurchased 172,061 shares for $2.3 million, down from 1 million shares for $8.9 million a year earlier.
For the second half, Heartland expects net capital expenditures of about $8 million to $14 million and equipment-disposal gains of $13 million to $19 million. Fleet investment will increase over the remainder of the year after average tractor and trailer ages declined from year-earlier levels.