third quarter of 2026
Filed Oct 21, 2026Heartland Express, Inc. Reports Net Income and Financial Results for the Third Quarter of 2026
The Company returned to quarterly net income and improved its operating ratio by 500bp from the third quarter of 2025, but operating revenue declined and fuel, maintenance, repair, and employee-related cost inflation remained pressure points.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Operating revenue (three months ended September 30, 2026)GAAP | $179.5M | – | – |
| Fuel surcharge revenue (three months ended September 30, 2026)other | $32.72M | – | – |
| Operating revenue excluding fuel surcharge revenue (three months ended September 30, 2026)non-GAAP | $146.8M | – | – |
| Salaries, wages, and benefits (three months ended September 30, 2026)GAAP | $65.89M | – | – |
| Rent and purchased transportation (three months ended September 30, 2026)GAAP | $9.28M | – | – |
| Fuel expense (three months ended September 30, 2026)GAAP | $43.24M | – | – |
| Operations and maintenance expense (three months ended September 30, 2026)GAAP | $12.26M | – | – |
| Operating taxes and licenses (three months ended September 30, 2026)GAAP | $3.76M | – | – |
| Insurance and claims (three months ended September 30, 2026)GAAP | $9.33M | – | – |
| Communications and utilities (three months ended September 30, 2026)GAAP | $1.96M | – | – |
| Depreciation and amortization (three months ended September 30, 2026)GAAP | $30.96M | – | – |
| Other operating expenses (three months ended September 30, 2026)GAAP | $8.36M | – | – |
| Gain on disposal of property and equipment (three months ended September 30, 2026)GAAP | −$7.83M | – | – |
| Operating expenses (three months ended September 30, 2026)GAAP | $177.2M | – | – |
| Adjusted operating expenses (three months ended September 30, 2026)non-GAAP | $143.2M | – | – |
| Operating income (loss) (three months ended September 30, 2026)GAAP | $2.30M | – | – |
| Adjusted operating income (loss) (three months ended September 30, 2026)non-GAAP | $3.55M | – | – |
| Net income (loss) (three months ended September 30, 2026)GAAP | $959K | – | – |
| Basic earnings (loss) per share (three months ended September 30, 2026)GAAP | $ 0.01 | – | – |
| Diluted earnings (loss) per share (three months ended September 30, 2026)GAAP | $ 0.01 | – | – |
| Operating ratio (three months ended September 30, 2026)GAAP | 98.7% | – | a 500bp improvement to Q3 2025 |
| Adjusted operating ratio (three months ended September 30, 2026)non-GAAP | 97.6% | – | – |
| Net income as a percentage of operating revenues (three months ended September 30, 2026)GAAP | 0.5% | – | – |
| Operating revenue (nine months ended September 30, 2026)GAAP | $539.9M | – | – |
| Fuel surcharge revenue (nine months ended September 30, 2026)other | $86.91M | – | – |
| Operating revenue excluding fuel surcharge revenue (nine months ended September 30, 2026)non-GAAP | $453.0M | – | – |
| Operating expenses (nine months ended September 30, 2026)GAAP | $524.3M | – | – |
| Adjusted operating expenses (nine months ended September 30, 2026)non-GAAP | $433.7M | – | – |
| Operating income (loss) (nine months ended September 30, 2026)GAAP | $15.55M | – | an improvement of $50.2 million |
| Adjusted operating income (loss) (nine months ended September 30, 2026)non-GAAP | $19.31M | – | – |
| Net income (loss) (nine months ended September 30, 2026)GAAP | $6.72M | – | – |
| Basic earnings (loss) per share (nine months ended September 30, 2026)GAAP | $ 0.09 | – | – |
| Diluted earnings (loss) per share (nine months ended September 30, 2026)GAAP | $ 0.09 | – | – |
| Operating ratio (nine months ended September 30, 2026)GAAP | 97.1% | – | – |
| Adjusted operating ratio (nine months ended September 30, 2026)non-GAAP | 95.7% | – | – |
| Cash and cash equivalents (September 30, 2026)GAAP | $48.50M | – | – |
| Long-term debt and finance lease liabilities - current portion (September 30, 2026)GAAP | $99.89M | – | – |
| Total assets (September 30, 2026)GAAP | $1.12B | – | – |
| Stockholders' equity (September 30, 2026)GAAP | $754.1M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Remainder of 2026 outlook
- NoteTotal net capital expenditures of approximately $2 to $5 million
- Note$9 to $13 million of total gains on disposal of property and equipment
Capital returns
- Purchased 183,371 shares of common stock for $2.2 million during the third quarter of 2026.
- Purchased 355,432 shares of common stock for $4.6 million for the nine months ended September 30, 2026.
- Regular dividend of $0.02 per share was declared during the third quarter of 2026 and paid on October 7, 2026.
- $4.6 million for dividends paid for the first nine months of 2026.
- The Company has the ability to repurchase an additional 4.5 million shares under the current authorization.
- A total of 2.2 million shares of common stock have been repurchased for $22.9 million over the past five years.
What drove it
- Management cited stronger freight volumes and improved customer pricing resulting from ongoing industry capacity reductions.
- Fuel surcharge revenue was $32.7 million in the third quarter of 2026, compared to $24.1 million in the same period of 2025.
- The acquisition-related debt and finance lease obligations of Smith Transport were fully retired in the first three months of 2026.
- The average age of the consolidated tractor fleet was 2.3 years as of September 30, 2026, compared to 2.6 years as of September 30, 2025.
Concerns
- Operating revenue was $179.5 million in the third quarter of 2026, compared to $196.5 million in the same period of 2025.
- Management said operating expenses were significantly impacted by rising fuel costs, inflationary impacts to maintenance and repairs, and other employee-related costs.
- Management does not expect the positive impacts of ongoing contract negotiations to be fully reflected in operating results until 2027.
- Operating ratio was 98.7%, leaving limited GAAP operating profitability in the quarter.
What to watch
- The timing of the expected positive impacts from ongoing contract negotiations, which management does not expect to be fully reflected until 2027.
- Execution of the remainder-of-2026 total net capital expenditure expectation of approximately $2 to $5 million.
- Delivery of the expected $9 to $13 million of total gains on disposal of property and equipment for the remainder of 2026.
- The Company's plan to continue disposing of excess trailers as used equipment market conditions improve.
- Fuel, maintenance, repair, and employee-related cost trends.
Balance sheet and cash flow
- Cash and cash equivalents were $48,503 (in thousands) as of September 30, 2026, compared with $18,475 (in thousands) as of December 31, 2025.
- Debt of $99.9 million remains at September 30, 2026.
- There were no borrowings under the Company's unsecured line of credit at September 30, 2026.
- Available borrowing capacity on the line of credit was $88.8 million after consideration of $11.2 million of outstanding letters of credit.
- Net cash flows from operations for the first nine months of 2026 were $55.1 million or 10.2% of operating revenue.
- Cash used for repayment of debt and financing leases was $59.9 million for the first nine months of 2026.
- Cash provided by investing activities included $44.7 million from net property and equipment transactions.
- Total assets were $1.1 billion and stockholders' equity was $754.1 million at quarter end.
Analysis
Heartland Express returned to profitability in the third quarter, reporting net income of $1.0 million and basic earnings per share of $0.01, compared with a net loss of $(8.3) million and basic loss per share of $(0.11) in the third quarter of 2025. Operating income was $2.3 million versus an operating loss of $(7.3) million. The GAAP operating ratio improved to 98.7% from 103.7%, while the non-GAAP adjusted operating ratio improved to 97.6% from 103.5%.
The recovery in profitability occurred despite lower revenue. Third-quarter operating revenue was $179.5 million, compared with $196.5 million in the prior-year period, and operating revenue excluding fuel surcharge revenue was $146.8 million, compared with $172.4 million. Management attributed improved financial results to stronger freight volumes and improved customer pricing associated with industry capacity reductions. Fuel surcharge revenue increased to $32.7 million from $24.1 million.
The cost structure improved in several areas, including salaries, wages, and benefits, rent and purchased transportation, insurance and claims, depreciation and amortization, and other operating expenses. Fuel expense increased to $43.2 million from $34.1 million. Management also cited rising fuel costs, maintenance and repair inflation, and other employee-related costs as significant operating-expense pressures. The quarter's 98.7% operating ratio and 0.5% net income margin underscore that profitability remains narrow.
For the first nine months, operating revenue was $539.9 million versus $626.4 million, while the Company generated operating income of $15.6 million and net income of $6.7 million, compared with operating and net losses in the prior-year period. Net cash flows from operations were $55.1 million, while $59.9 million was used for repayment of debt and financing leases. Smith Transport acquisition-related debt and finance lease obligations were fully retired in the first three months of 2026, and debt remaining at September 30, 2026 was $99.9 million.
Capital allocation included $4.6 million of nine-month share repurchases, $4.6 million of dividends paid, and a regular dividend of $0.02 per share that was paid on October 7, 2026. For the remainder of 2026, management expects total net capital expenditures of approximately $2 to $5 million and $9 to $13 million of total gains on disposal of property and equipment. Management expects to rely on positive operating cash flows to invest in tractors and trailers and does not expect the effects of ongoing contract negotiations to be fully reflected in results until 2027.
Management, verbatim
Our consolidated operating results for the three months ended September 30, 2026, reflect significant operating ratio improvement (98.7%) as compared to the third quarter of 2025 (103.7%). The improved financial results reflect stronger freight volumes and improved customer pricing resulting from ongoing industry capacity reductions, even though we do not expect the positive impacts of ongoing contract negotiations to be fully reflected in our operating results until 2027.
Mike Gerdin, Chief Executive Officer
Not in the filing
stated, not guessed- Gross margin was not reported.
- Free cash flow was not reported.
- Quarterly operating cash flow was not reported.
- Quarterly capital expenditures were not reported.
- No prior outlook section was provided, so comparison with prior guidance is unavailable.
- No segment revenue disclosure was reported.
- No tax-rate guidance was reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.