Truckload carrier Heartland Express posted a sixth straight quarterly net loss (excluding one-time gains) but noted some improvement in fundamentals so far in the new year.
North Liberty, Iowa-based Heartland (NASDAQ: HTLD) reported a net loss of $1.9 million, or 2 cents per share, for the 2024 fourth quarter (just a 1-cent loss when excluding deal-related amortization expense). The result was better than the consensus expectation of a 4-cent loss for the period.
The carrier reported headline earnings per share of 6 cents in the prior-year period. However, that quarter included nonrecurring gains of $25.6 million from the sale of three terminals.
In a Tuesday news release, CEO Mike Gerdin cautiously noted favorable trends so far in the first quarter with the expectation of momentum building throughout the year.
âWhile it is early in the quarter and extreme winter weather conditions so far in 2025 make comparison difficult, we are seeing a positive shift in customer rate and volume negotiations that we expect to strengthen as the year unfolds,â Gerdin said.
The fourth quarter included $6 million in gains on the sale of used equipment, which are viewed by analysts as part of normal operations and a recurring offset to operating expenses. However, Heartlandâs gains on equipment sales in 2024 were heavily weighted to the fourth quarter (80% of the full-year total) and benefited the period by roughly 6 cents when using a normalized tax rate.
Fourth-quarter revenue of $242.6 million was 11.9% lower year over year and 8.9% lower when excluding the impact of fuel surcharges. Revenue excluding fuel was 5.5% lower than in the third quarter.
Heartland does not provide operating metrics for utilization and pricing.
The carrier booked a 98.9% adjusted operating ratio (operating expenses expressed as a percentage of revenue), which was 400 basis points worse than the 2023 fourth quarter (inclusive of the real estate gains) but an improvement from the 105.8% OR that excluded the gains.
Salaries, wages and benefits (as a percentage of revenue) were down 60 bps y/y, and rents and purchased transportation expenses fell 220 bps. Operations and maintenance expenses were 190 bps higher as the average tractor age increased to 2.5 years in the quarter from 2.2 years in the year-ago period.
The companyâs average tractor age for the current cycle peaked at 2.7 years in the third quarter.
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Heartland has seen a prolonged stretch of tough results in part due to the severity of the freight recession but also as it acquired two fleets (Smith Transport and Contract Freighters) in the summer of 2022 â the early days of the downturn.
Its legacy operations, which include the 2019 acquisition of Millis Transport, generated a 96.3% OR in the fourth quarter. Heartland didnât provide a y/y comparison, instead opting to compare results to the seasonally weakest first quarter. Legacy operations generated a 99.9% OR in the 2024 first quarter.
The fleets acquired in 2022 operated at a 102.6% OR in the fourth quarter compared to a 109.7% OR in the first quarter.
The companyâs 2023 fourth-quarter report showed full-year ORs of 86.9% for the legacy business and 103.8% for the acquired fleets (inclusive of the real estate gains).
âWe are making progress and have significant additional room for improvement through self-help and market uplift when it occurs,â Gerdin said. âWe expect to continue our focus on cost improvements, operating system integrations, and asset utilization strategies ahead of an expected favorable increase in overall freight demand.â
He said the goal is to return to a low- to mid-80s OR, expand the profitable revenue base (including through future acquisitions) and return to a debt-free balance sheet.
The company repaid $100 million in debt during 2024 (and nearly $300 million in total since the 2022 acquisitions). It ended the year with $187.9 million in net debt (inclusive of financing lease obligations) with no balance on a revolving credit facility that has $88.3 million in availability.
Shares of HTLD were off 2.6% at 1:07 p.m. EST on Tuesday compared to the S&P 500, which was up 0.9%.
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