Heartland Express (NASDAQ: HTLD) pointed to winter storms as having a negative impact on revenue during the first quarter on Wednesday.
The North Liberty, Iowa-based carrier reported earnings per share of 17 cents, a penny light of consensus but a penny higher year-over-year. Revenue, excluding fuel surcharges, was down 8% to $136 million.
“The first two months of the quarter delivered strong freight demand but were restricted by significant weather shutdowns in the month of February,” stated CEO Mike Gerdin in the press release. “Extreme winter weather events affected the company’s revenues during the month of February while at the same time we continued to pay our drivers during extended weather shutdowns to protect their pay while we had them shut down for safety.”
Salaries, wages and benefits (+30 basis points) and purchased transportation (-30 bps) expenses as a percentage of revenue were largely in line with prior-year levels. The company reported an 86.5% adjusted operating ratio, 170 bps better than the first quarter of 2020.
“We also continue to navigate the challenge to recruit, hire and retain qualified and safe operating drivers,” Gerdin continued. He said the company plans to implement additional “driver pay enhancements” during the second quarter.
The carrier raised driver pay by an average of 6% in October.
Gains on equipment sales of $4.2 million provided a roughly 4-cent-per-share earnings improvement compared to the year-ago quarter. Booking gains on the sale of tractors is commonplace in trucking. However, Heartland actually booked a slight loss on the line item in the first quarter of 2020.
Heartland’s exit rate in the first quarter was strong, similar to results seen by other carriers. Refrigerated carrier Marten Transport (NASDAQ: MRTN) said March accounted for nearly half of the quarter’s EPS at 10 cents per share on Thursday.
“The month of March delivered a strong finish to the end of the first quarter, with significantly better revenue and operating results as compared to the first two months of 2021,” Gerdin added.
Heartland Express does not provide any operating metrics around utilization and pricing.
The carrier ended the quarter with $148 million in cash and no debt. Net cash generated from operations was $35 million for the period. Heartland used $15 million in cash to repurchase stock and $1.6 million to pay dividends.
The average age of the tractor fleet was reduced to 1.7 years from 2 years at the end of the 2020 first quarter. Heartland expects net capital expenditures to be in the range of $85 million to $95 million for the full year.
Uses of cash beyond capex, share repurchases and dividends were not discussed in the press release. In the past, the company has referenced using available debt and its strong cash position to make acquisitions. Heartland has made three large acquisitions in the last decade.
Shares of HTLD were flat midday Wednesday compared to the S&P 500, which was up 0.6%.
Click for more FreightWaves articles by Todd Maiden.
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