William B. Cassidy, Senior Editor | Apr 18, 2012 2:18PM EDT
Productivity gains from an expanding fleet of drivers and tractor-trailers helped truckload carrier Heartland Express outrun higher costs in the first quarter.
The North Liberty, Iowa, company, one of the top 25 truckload carriers, increased its net profit 11.6 percent in the first quarter to $16.6 million as revenue jumped 5.6 percent to $134.8 million.
The trucking company’s operating ratio dropped year-over-year from 82.9 percent to 82.4 percent, while its net margin rose from 11.9 percent to 12.3 percent.
In 2011, Heartland boosted net profit 12.4 percent to $69.9 million on a 5.8 percent increase in revenue to $528.6 million.
The carrier’s first quarter results are another indicator of steady freight demand in the first quarter. Heartland said it will expand capacity to meet that demand.
Heartland’s drivers logged 3.2 percent more miles than a year ago in the first quarter, and the carrier added 27 new Navistar International tractors.
“We achieved fleet growth in the first quarter for the first time in the past five quarters,” Heartland executives said in a statement Wednesday.
The company will add 1,000 new Wabash trailers this year, upgrading its fleet as it sells old equipment. “We will take advantage of the favorable used trailer market.”
Fuel costs rose by $3.6 million compared with the year ago quarter to $42.7 million, a 9.1 percent increase. Fuel surcharge revenue rose 15.9 percent to $28 million.
Net of fuel surcharges, Heartland’s revenue rose 2.6 percent, according to John Larkin, managing director at investment research firm Stifel Nicolaus.
Heartland did not release data on its freight volume or truckload yield, but he believes the carrier’s rates are edging higher, Larkin said in an April 18 note to investors.
“We would estimate pricing was up slightly more than the increase in fuel-adjusted revenue, which implies a slight decline in volume,” Larkin said.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter @wbcassidy_joc.
