Werner Enterprises Reports Strong Q1 Results
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Werner Enterprises Inc. saw strong revenue and earnings growth during the first quarter of 2021, the company reported April 28.
The Omaha, Neb.-based freight carrier and logistics company posted net income of $46.5 million, or 68 cents a diluted share, for the three months ending March 31. That represents a 102% increase from the same time last year at $23.1 million, 33 cents. The total revenue increased by 4% to $616.4 million from $592.7 million.
The results just about matched expectations by investment analysts on Wall Street, which had been looking for 63 cents per share and quarterly revenue of $616.13 million, according to Zacks Consensus Estimate.
“I’m pleased to report that Werner produced record earnings in the first quarter, achieved by outstanding operational execution while we maintain a laser focus on the health and safety of our associates,” Werner CEO Derek Leathers said during a conference call with investors April 28. “I sincerely appreciate the significant contributions of our entire Werner team to meet and exceed the needs of our customers.”
Leathers said he expects strong truckload freight demand to continue into 2022, as robust sales combined with supply chain challenges mean retail inventories will need replenishing. Plus, he noted that coronavirus stimulus relief payments will help bolster consumers’ finances.
“As the freight demand pump has been primed, the supply of truckload capacity is constrained due to a tight driver market,” Leathers said. “Werner is well-positioned to thrive in this business environment.”
Werner credited its Q1 revenue increase to higher pricing in truckload logistics and intermodal resulting in overall growth in logistics revenue. The company also said it expanded margins due to significantly higher revenue per total mile, strong safety performance, cost management and improved gains on sales of trucks and trailers. Those margin gains were partially offset by lower miles per truck due to severe winter weather, a higher percentage of dedicated trucks to total trucks, fewer driver teams and higher driver pay per mile, the company said.
The logistics segment reported revenue increased 23% for the quarter to $137.9 million from $112.2 million during the same time last year. Operating income for the segment soared 322% to $4.6 million from $1.1 million during the prior-year Q1.
The results were partially driven by truckload logistics revenue increasing 20%. That represents 63% of total logistics revenue. Truckload logistics volume decreased 1%, and revenue per load increased 22%. The segment results were also driven by intermodal operations, which reported that revenue increased 30% due to volume growth and higher revenue per load.
Truckload transportation services segment revenue for Q1 decreased 0.4% to $462.9 million from $464.9 million during the same time last year. Operating income for the segment increased 98% for the quarter to $57.6 million compared with $29.1 million last year.
The results for the truckload transportation services segment were in part a result of seasonally strong freight demand in the dedicated and one-way truckload fleets. But winter weather decreasing miles per truck resulted in a higher percentage of dedicated trucks to total trucks and fewer driver teams, Werner said. Segment truck miles decreased by approximately 12 million miles, and independent contractor miles decreased by approximately 5.8 million miles.
Cowen and Co. analyst Jason Seidl in a report said Werner’s comments on the tightening freight environment were in line with those of other truckload carriers.
“It was to no surprise that [Werner] saw strong continued freight demand and took advantage of the pricing environment,” Seidl wrote in the report.
Werner Enterprises has more than 7,800 tractors, 24,000 trailers and about 13,000 employees and independent contractors. The company provides service throughout North America, Asia, Europe, South America, Africa and Australia.
Werner ranks No. 16 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 30 on the TT Top 50 list of the largest logistics companies.
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