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Werner Enterprises achieved its eighth consecutive quarter of record earnings per share during the second quarter of 2022, the company reported Aug. 3.
The Omaha, Neb.-based freight carrier and logistics company posted net income of $73.6 million, or $1.12 a diluted share, for the three months ending June 30. That compared with $72 million, $1.06, during the same time the previous year.
Revenue increased by 29% to $836.3 million from $649.8 million.
“I am pleased to report that for the eighth consecutive quarter we achieved record quarterly adjusted EPS,” Werner CEO Derek Leathers said during a call with investors. “We had strong performance from both dedicated and logistics and effectively steered our way through a moderating freight market in one-way truckload. These record earnings were achieved despite unusually high insurance and claims expense in the quarter.”
Leathers added that insurance claims expenses increased by more than $20 million year-over-year. The majority of the increase related to recent unexpected legal developments for two prior-year accidents that have been settled. Insurance and claims expense averaged $25 million over the prior eight quarters. This quarter came in at $41 million.
“During second quarter, we added 175 trucks in our truckload transportation services segment, ending the quarter with 8,400,” Leathers said. “Consistent with our plans most of these additions were in dedicated. Our fleet mix in quarter end remains 63% dedicated and 37% one-way truckload. Overall, our consumer-oriented freight base is performing well. Nearly three-quarters of our freight revenues are in retail and food and beverage.”
The results surpassed expectations by investment analysts on Wall Street, who had been looking for $1.02 per share and quarterly revenue of $784.22 million, according to Zacks Consensus Estimate.
“We expect freight volumes related to shipments of consumer staples to remain strong,” Leathers said. “Three of our top five customers are discount retailers who thrive in economic markets when consumers place a high priority on value. Our two other top five customers are industry-leading home improvement and beverage companies.”
The truckload transportation services segment saw revenue in the second quarter increase 25% to $613.6 million from $491.2 million during the same time last year. Operating income decreased 12% to $64 million from $73.1 million. This decline was due to the higher insurance and claims costs. Average revenues per truck per week increased 5.4% to $4,532 from $4,301. The total number of trucks increased 9.9% to 8,400 from 7,645. The segment includes dedicated and one-way truckload operations.
“Dedicated continues to experience strong demand from the majority of its long-term customers,” Leathers said. “New dedicated business opportunities continue to remain strong as shippers search for capacity solutions, high service and better visibility to transportation costs in a volatile freight environment. The driver market has shown some signs of easing, but remains very competitive in a tight labor market.”
The one-way truckload operations saw trucking revenue increase 13.2% to $188.2 million from $166.2 million during the prior-year quarter. Dedicated operations saw trucking revenue increased 14.4% to $300 million from $262.4 million.
The logistics segment reported that revenue increased 44% to $203.9 million from $141.7 million the prior year. Operating income surged 218% to $12.5 million from $3.93 million. The results were driven by adjusted operating income improvements during the quarter alongside revenue growth and adjusted operating margin expansion. The segment includes truckload logistics, intermodal and final-mile operations.
The truckload logistics revenue increased 36%. This was driven by a 17% increase in revenues per shipment and a 16% increase in shipments. Intermodal revenue increased 18%. This was supported by a 35% increase in revenues per shipment that was partially offset by a 13% decrease in shipments. Final Mile revenue increased $21.1 million. This was due to the November 2021 acquisition of NEHDS Logistics and continued growth from the national final-mile agent network.
Werner ranks No. 17 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 33 on the TT Top 100 list of the largest logistics companies.
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