Heartland Express earnings, revenue fall

Heartland Express on Tuesday reported a lower first-quarter net profit that beat analysts' expectations and revenue that missed projections as weaker freight volumes and lower fuel surcharge revenues took their toll.

The North Liberty-based truckload carrier and logistics company ended the first quarter of 2016 with net income of $14.4 million, or 17 cents per share, compared with $17.6 million, or 20 cents per share, in the first quarter of 2015. Analysts for Zacks Investment Research had been expecting earnings of 16 cents per share.

Heartland Express posted first-quarter operating revenue of $162.8 million, down $187.5 million in the first quarter of 2015. Operating revenue included fuel surcharge revenue of $13.1 million, compared with $26.1 million in the same period of 2015,

Zacks Investment Research analysts were expecting operating revenue of $175.3 million.

On March 31, Heartland Express had $69.7 million in cash balances and no borrowings under its unsecured line of credit. The company had $194.5 million in available borrowing capacity on a line of credit and continues to be in compliance with related financial covenants.

'During the first quarter of 2016, we took another step toward a return to a low 80s adjusted operating ratio (operating expenses as a percentage of revenue),” Heartland Express Chief Executive Officer Michael Gerdin said in a news release. 'We were able to achieve this despite weaker freight volumes and more downward pressure on freight rates in 2016 compared to the first quarters of 2015 and 2014.”

In a report on the truckload industry issued in late March, analysts at Stifel Inc. of Chicago said pricing for long-haul trucking services is expected to remain weak for the rest of the year.

'Shippers are under enormous pressure to cut transportation costs and seem not to be satisfied with the massive fuel surcharge reductions racked up over the past year and a half,” the report read.