Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter ended March 31, 2011. Operating revenues for the quarter increased 10.4% to $127.7 million from $115.6 million in the first quarter of 2010. Net income was $14.9 million compared to $11.9 million in the 2010 period, a 25.2% increase. Earnings per share increased 23.1% to $0.16 from $0.13 reported in the first quarter of 2010. For the quarter, Heartland Express, Inc. (the “Company”) posted an operating ratio (operating expenses as a percentage of operating revenues) of 82.9% and an 11.7% net margin (net income as a percentage of operating revenues) compared to 86.3% and 10.3%, respectively, in the first quarter of last year.
The demand for freight services improved throughout the quarter. However, operating results were hindered by a combination of tight driver availability, escalating fuel prices, and an unusually harsh winter in certain operating regions. Fuel expense increased $9.6 million or 32.5% during the quarter primarily due to an increase in average fuel prices. During the quarter ended March 31, 2011 the U.S. average cost of fuel was $3.657 per gallon compared to $2.853 per gallon for the same period of 2010, a 28.2% increase. The Company is aggressively managing fuel surcharge pricing, truck idling hours, and fuel purchasing decisions in an effort to offset a portion of the accelerating fuel costs. Additionally, our current fleet is more fuel efficient than our fleet of a year ago and all 2009 and newer model trucks are equipped with idle management controls.
The average age of the Company's tractor fleet was 1.85 years as of March 31, 2011 with 94.1% of the fleet being 2009 models and newer. The Company took delivery of 148 2012 ProStar Internationals in the first quarter. The Company continues to upgrade its trailer fleet and took delivery of 638 2012 Great Dane and Wabash trailers during the first quarter. This upgrade will continue throughout 2011 with purchases of an additional 1,962 new Great Dane and Wabash trailers. These fleet upgrades will keep our tractor and trailer fleet new and positions the Company to take advantage of growth opportunities. As of March 31, 2011, 94.1% of the Company's tractor fleet was equipped with electronic on-board recorders. The new fleet of tractors and trailers and electronic on-board recorders will improve our industry leading safety scores in our effort to maintain the best Compliance, Safety, and Accountability (CSA) rating among truckload carriers.
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