The slow increase in revenue, compared with a 5.6 percent gain for Heartland in the first quarter, is another sign of slower economic growth.
The modest year-over-year gain was the highlight of the report, particularly against the backdrop of a freight economy that is moving sideways, Jefferies analyst Peter Nesvold said.
Our best sense is that (Heartland’s) rates were up only in the low single digits and that volumes were flattish, Nesvold said in a July 19 note to investors.
Despite the year-over-year earnings drop, Heartland remained a highly profitable truckload carrier, with a 13 percent net margin and 80.9 percent operating ratio.
Heartland’s operating ratio in the previous two quarters was 82.4 percent and 79.5 percent, a sign that overall profitability improved from the first quarter.
The company has maintained a net margin in the 12 to 13 percent range over the past three quarters. Last year, Heartland generated a $69.9 million net profit.