Jefferies Gives Heartland Express Earnings Review

Heartland Express HTLD reported EPS of $0.17 which was inline with consensus of $0.17, but missed Jefferies high-end $0.20 estimate. Based on channel checks suggesting a potential reacceleration of TL industry pricing in November and December, it had increasingly expected a substantially upside 4Q report. Revenue was relatively inline; the miss vs. our high-end forecast appears to have been related to operating expenses. Although a higher-than-expected tax rate was about a $0.01 headwind vs. Jefferies model, this appears to have been fully offset by higher-than-expected equipment gains on sale. As a result, Jefferies sees the two as a wash. Management cited continued tightness in industry capacity, a dynamic that we have heard throughout the TL industry over the last two months. However, the company also cited "moderate" freight volumes in a "less than robust economy." Jefferies has a $15 PT and Hold rating on HTLD HTLD is trading lower at $15.81