Heartland Express 2025 Q1 Earnings Misses Targets as Net Income Improves 8.2%

Heartland Express (HTLD) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company fell short of analyst expectations, with revenue and EPS below forecasts. Despite adverse conditions, Heartland Express improved its net income loss compared to the previous year. The company maintained its guidance, expecting net capital expenditures for 2025 to range between $40 million to $50 million. CEO Mike Gerdin expressed cautious optimism about a potential freight market recovery, although significant improvements are not anticipated until later in 2025.

Revenue

Heartland Express saw a decline in total revenue for Q1 2025, reaching $219.42 million, a reduction of 18.8% from $270.32 million in Q1 2024. The company's operating revenue mirrored this figure, underscoring the challenging market conditions affecting its business segments.

Earnings/Net Income

Heartland Express reported a loss of $0.18 per share for Q1 2025, slightly improving from a $0.19 loss per share in Q1 2024. Net income showed an improvement, with a reduced net loss of $13.87 million compared to $15.11 million in the previous year. Despite narrowing losses, the EPS performance remains unfavorable.

Price Action

The stock price of Heartland Express edged up 1.71% during the latest trading day, surged 15.41% in the most recent full trading week, and increased 1.83% month-to-date.

Post-Earnings Price Action Review

The strategy of buying HTLD when revenue exceeds expectations and holding for 30 days proved ineffective, delivering negative returns of -57.27% with a Sharpe ratio of -0.57, indicating significant risk. The maximum drawdown reached -65.53%, while volatility stood at 27.55%, demonstrating high risk without capitalizing on positive revenue news. This approach failed to provide a viable investment strategy, suggesting that investors should explore alternative methods to leverage market opportunities.

CEO Commentary

Mike Gerdin, Chief Executive Officer, reflected on the quarterly results, noting challenges such as adverse weather, tariff uncertainties, and operating cost inflation surpassing demand and freight rate improvements. He acknowledged profitability in the Heartland Express brand but highlighted under-utilization and driver retention challenges in other brands. Gerdin discussed strategic fleet reductions to align with demand and cost efficiency measures, expressing cautious optimism about an early freight market recovery.

Guidance

Heartland Express anticipates net capital expenditures between $40 million to $50 million for 2025, with projected gains from property and equipment disposals ranging from $10 million to $15 million. Efforts to enhance cost structures and operational visibility are ongoing, with a focus on achieving profitability over the next twelve months. Market improvements are not expected until later in 2025.

Additional News

Heartland Express recently announced the election of Amanda M. Hupfeld to its Board of Directors, a decision made at the Annual General Meeting on May 8, 2025. This strategic addition aims to strengthen leadership and support the company's ongoing initiatives. Moreover, Heartland Express declared a regular quarterly dividend of $0.02 per share, reinforcing its commitment to shareholder returns. The company continues to operate debt-free on its line of credit, maintaining financial flexibility amidst industry challenges.