Heartland Express Inc. on Wednesday, Oct. 20, announced financial results for the quarter ended Sept. 30. Operating revenues increased 12.2 percent to $127.2 million from $113.4 million in the third quarter of 2009. Net income was $18.3 million compared to $14.5 million, a 26.1 percent increase. The company posted an operating ratio (operating expenses as a percentage of operating revenues) of 77.2 percent and a 14.4 percent net margin (net income as a percentage of operating revenues).
For the nine-month period, operating revenues increased 7.2 percent to $370.3 million from $345.3 million in the 2009 period. Net income was $46.8 million compared to $46.3 million, a 1.2 percent increase. The company posted an operating ratio of 81.9 percent and a 12.6 percent net margin.
The North Liberty, Iowa-based company said operating revenues continue to improve as a result of tighter industry capacity, but the increase in freight demand has leveled off in comparison to the second quarter of 2010 and continues to lag dramatically behind that experienced in 2007 prior to the recent recession. Freight rates have increased this year since reaching bottom in the third quarter of 2009 and appear to be stabilizing. The company continues to focus on improving utilization and cost controls.
The company said the industry continues to be challenged by driver recruitment and retention, a challenge that is expected to amplify with the implementation of the stringent safety requirements of Comprehensive Safety Analysis 2010 and the potential impacts on the carriers in the industry and the number of qualified drivers. The company has begun the installation of PeopleNet electronic onboard recorders and currently is transitioning to paperless logs to improve safety, equipment utilization and customer service.
Heartland purchased 200 new 2011 International ProStar tractors in the third quarter, with delivery expected to be completed this month, to take advantage of growth opportunities. The company also is upgrading its trailer fleet with the purchase of 600 new Great Dane trailers, with delivery expected to be completed prior to yearend.