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Werner Enterprises posted declines in fourth-quarter and full-year profits but came in ahead of Wall Street expectations for its Q4 profit.
The Omaha, Neb.-based transportation and logistics company on Feb. 5 posted Q4 net income of $48.5 million, or 70 cents per diluted share, compared with 54.6 million, or 77 cents, in Q4 2018. Revenue for the three-month period ended Dec. 31 decreased by 4% to $621.8 million from $646.4 million.
The results beat the 60 cents per share quarterly profit forecast of analysts polled by Zacks Consensus Estimate, but fell short of the analysts’ forecast of $633.8 million in Q4 revenue.
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For the full year, Werner reported net income of $167 million, or $2.39 a share, on revenue of $2.4 billion in 2019, compared with net income of $168 million, or $2.38 a share, on revenue of $2.46 billion in 2018.
“2019 was a below average freight and rate year compared to a stellar freight and rate year in 2018,” Werner CEO Derek Leathers said during an earnings call shortly after the report was released. “We’re pleased that in 2019 our exceptional execution, effective cost management and balanced revenue model has enabled us to successfully weather the storm and generate strong financial results. Adjusted earnings per share were the second highest we’ve ever reported in the fourth quarter and our full-year 2019 adjusted earnings per share established a new record high.”
Leathers said Q4 was operationally more difficult this year due to a compressed holiday shipping period, but noted that the company delivered a double-digit operating margin in the quarter despite the challenging market conditions.
“I’m extremely proud of Werner’s performance and execution in 2019 amid the challenges we faced,” Leathers said. “Our team and our business model are well positioned to quickly adjust to whatever conditions present themselves in 2020.”
Breaking down by segment, the company’s truckload transportation services division generated Q4 operating income of $59.2 million, down 11% from $66.8 million in Q4 2018. Revenue decreased 2% to $486.6 million from $494.7 million. Werner cited an $11.4 million decrease in fuel surcharge revenue and a 1.8% decrease in average revenue per truck for the declines, which were partially offset by a 3.3% increase in average trucks in service.
Werner Logistics generated Q4 operating income of $3.4 million, down more than 54% from $7.2 million in 2018. Gross revenue decreased 12% to $120.1 million from $137.2 million. The company cited fewer transactional freight opportunities, less attractive contract, transactional pricing and increased competition for the decline.
Leathers said that while Werner doesn’t plan to increase its fleet size until conditions improve — which he expects will occur in the second half of 2020 — the company is looking to build more terminals.
Werner ranks No. 15 on the Transport Topics Top 100 list of largest for-hire carriers in North America and No. 20 on the Transport Topics Top 50 list of largest logistics companies.
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