Heartland Profit Grows, But Outlook Dim

Truckload carrier Heartland Express defied the economic downturn with a 2 percent boost in net profit in the second quarter, but the carrier said July 14 it sees little improvement in the economy and no “strong indicators” demand for freight services will increase in the near term.  

The company earned $17.6 million during the quarter that ended June 30, up from $17.2 million during the same period last year.

Operating revenue for the quarter fell 28.9 percent to $117 million from $164.6 million in the second quarter of 2008, driven down by a reduction in fuel surcharge revenue and the continued economic downturn’s pressure on freight rates.

“This extended economic downturn is the worst experienced in the history of our company. There continues to be excess capacity in our industry combined with the continued decline in available freight resulting in extreme pressure on freight rates,” Heartland said in its report on the three month period ending June 30.

“The company has not seen any strong indicators of improvements in the demand for freight services that would increase our levels of business in the near future," Heartland said.

Heartland's operating profit edged up 3.8 percent from last year, to $21.7 million and its operating ratio improved from 87.3 percent last year to 81.4 percent this year. The company said its operating profit for the second quarter was helped by $4.2 million on an increase in gains on disposal of property and equipment.

Heartland Express ended the quarter with $205 million in cash, down 10 percent from the end of 2008, because it bought 461 new tractors during the first half of the year, and repurchased stock.

Contact Marcy Behrmann Frank at mfrank@joc.com.