Earnings for the trucking company Heartland Express Inc. (NASDAQ: HTLD) declined in both the final quarter of 2015 and all of last year due to less business while Patriot Transportation Holding Inc. (NASDAQ: PATI) saw an improvement due in large part to a legal settlement.
Iowa-based Heartland saw net income for the fourth quarter of 2015 decline 21% from a year earlier to $17 million. That translates into basic earnings of 20 cents per share in the most recent three-month period, compared to 25 cents per share in 2014.
Operating revenues were $174.6 million compared to $203.million, a 14% decrease. This included fuel surcharge revenues of $18.2 million compared to $36.2 million in the same period of 2014. Excluding fuel surcharge revenue, operating revenues decreased 6.2%
“This reduction in operating revenues resulted primarily from lower load volumes which were generally due to lower overall industry volumes,” the company said in a statement.
For all of 2015, Heartland had basic earnings per share of 84 cents compared to 97 cents in 2014 or net income of $73.1 million versus $84.8 million.
Operating revenue fell from $871.4 million in 2014 to $736.3 million last year. For 2015, this included fuel surcharge revenues of $91.8 million compared to $170.4 million for the same period of 2014, a $78.6 million decrease, but fell just 8%, excluding fuel surcharge revenues.
Heartland also reported the average age of its tractor fleet at the end of 2015 was 1.25 years compared to two years at the end of 2014. It took delivery of approximately 1,500 new tractors last year. The average age of its trailers during the same time frame increased slightly to 4.6 years in 2015, as it took delivery of 500 new trailers.
"At the end of 2015 we completed a two year capital investment campaign equating to approximately $182 million net capital reinvestment. We successfully took advantage of a strong used equipment market that has subsequently weakened, to solidify one of our core operating principals of providing late-model revenue equipment to our drivers and customers,” said Heartland Express CEO Michael Gerdin.
“Although our revenue equipment goals took a lot of operational time and efforts, the company did not lose sight of providing high levels of customer service as evidence by another strong year of customer service acknowledgments," he continued. "Our ability to make significant investments in our fleet of revenue equipment, significantly increase driver pay, and repurchase $74.0 million of our common stock, while paying off remaining debt, is a testament to the Company's financial strength and historical strong cash flows.
More details are on the Heartland Express website.
Patriot Transportation Revenue Declines
Meantime, the parent of liquid and dry bulk hauler Florida Rock and Tank Lines, Patriot Transportation Holding, reported net income of $1.5 million in the final quarter of 2015, or 46 cents per basic and diluted shares, compared to $1.1 million, or 34 cents, for the same time in 2014.
This included nearly $1.03 million, or 31 cents per share, of net income from the settlement of a claim against BP Exploration and Production Inc. in connection with the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico, which resulted in other income of nearly $1.7 million.
Total revenue in the most recent quarter was $29.4 million compared to $31.7 million a year earlier, which the company attributed to lower fuel surcharges of nearly $3.1 million. Revenue excluding fuel surcharges increased $717,000, or 2.6%, to $28 million on 368,000 fewer revenue miles, an increase of 6.3% per mile versus the same quarter last year, according to the company.
It noted the cost of fuel was down $2.18 million over the same quarter last year, which was not enough to fully offset the $3.06 million reduction in fuel surcharge revenues.
“Compensation and benefits costs were up $589,000 versus the first quarter of fiscal 2015 as we continue to invest in improving in the areas of driver hiring, training and retention through driver pay increases, additional recruiting costs, higher training costs and a newly implemented ‘minimum pay’ scale to help us retain drivers,” Patriot said in a news release. “We are beginning to see the benefits of our investments as we grew our ending driver count for this quarter to 704 versus 686 in the same quarter last year.”
According to the company, during the quarter, higher costs associated with hiring drivers, insurance and losses and the lower fuel surcharges more than offset the growth in transportation revenue.
“Management believes we are seeing the benefits of our investment on the driver hiring and retention front as our driver count has grown and our annualized turnover rate improved from 79% in the fourth quarter of last year to 65% this quarter,” the company said. “Our primary goal for our shareholders is to grow profitably, maintain a strong balance sheet and get back to our targeted returns on capital employed. To that end, we remain focused on improving our transportation revenue per mile, adjusting the fuel surcharge pricing structure with our customers, and growing our driver count to meet the strong seasonal demand typically beginning at the end of the second quarter.”
There is more information on the Patriot Transportation website.