Heartland Express Earnings Preview

Investors hope Heartland Express (Nasdaq: HTLD  ) will top analyst estimates once again after beating predictions by one cent in the previous quarter. The company will unveil its latest earnings on Monday. Heartland Express is a short-to-medium-haul truckload carrier of general commodities. It provides transportation service to shippers, using late-model equipment and a combined fleet of company-owned and owner-operator tractors.

What analysts say:

• Buy, sell, or hold? Analysts think investors should stand pat on Heartland Express with 10 of 18 analysts rating it hold. Analysts like Heartland Express better than competitor Knight Transportation overall. Seven out of 24 analysts rate Knight Transportation a buy compared with six of 18 for Heartland Express. While analysts still rate the stock a hold, they are a little more optimistic about it compared with three months ago.
• Revenue forecasts: On average, analysts predict $143.5 million in revenue this quarter. That would represent a rise of 12.6% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of 21 cents per share. Estimates range from 18 cents to 24 cents.

What our community says:
CAPS All Stars are solidly behind the stock with 84.6% assigning it an "outperform" rating. The community at large concurs with the All Stars with 89.5% giving it a rating of "outperform." Fools are keen on Heartland Express, though the message boards have been quiet lately with only 30 posts in the past 30 days. Despite the majority sentiment in favor of Heartland Express, the stock has a middling CAPS rating of three out of five stars.

Management:
Heartland Express' profit has risen year over year by an average of 22.4%. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 5.6 percentage points in the last quarter. Revenue rose 10.4% while cost of sales rose 30.6% to $46.2 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q1	Q4	Q3	Q2
Gross Margin	63.8%	68.4%	69.3%	70.4%
Operating Margin	14.1%	16.8%	16.6%	15.7%
Net Margin	11.7%	11.9%	14.4%	13.1%

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