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Werner (WERN) Shares Down 6% on Q2 Earnings & Revenue Miss
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Shares of Werner Enterprises, Inc. (WERN - Free Report) have lost 6.03% in after-market trading on Jul 30, 2024. The downside was owing to the disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings of 17 cents per share lagged the Zacks Consensus Estimate of 23 cents and declined 67.3% on a year-over-year basis.
Total revenues of $760.8 million lagged the Zacks Consensus Estimate of $774.5 million and dipped 6.2% on a year-over-year basis due to $33.1 million or 6%, decrease in Truckload Transportation Services (TTS) revenues and a $15.6 million, or 7% decline in Logistics revenues.
Adjusted operating income of $21.26 million decreased 58% year over year. Adjusted operating margin of 2.8% declined 350 basis points from the year-ago reported quarter.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Revenues in the TTS segment fell 6% on a year-over-year basis to $537.06 million due to lower fuel surcharge revenues. Adjusted operating income of $23.33 million fell 51% year over year owing to lower gains on the sale of property and equipment (down 89%), lower fleet size in Dedicated (down 7.1%) and lower One-Way revenue per total mile, net of fuel surcharge (down 2.7%). Adjusted operating margin decreased 410 basis points to 4.3%.
Logistics’ revenues totaled $208.91 million, down 7% year over year. Adjusted operating income of $1.698 billion fell 69% from the year-ago reported quarter. Adjusted operating margin decreased 160 basis points year over year to 0.8%.
Liquidity
As of Jun 30, 2024, Werner had cash and cash equivalents of $70.44 million compared with $60.33 million at the prior-quarter end. Long-term debt (net of current portion) totaled $660 million at the end of the reported quarter compared with $596.25 million at the prior-quarter end.
The company generated $109.1 million of cash from operations in second-quarter 2024. Net capital expenditure amounted to$99.2 million.
During the reported quarter, WERN repurchased 1.6 million shares for a total cost of $60 million. As of Jun 30, 2024, WERN had 3.9 million shares remaining under its new share repurchase authorization approved by the board of directors in May 2024.
Outlook
For 2024, Werner still anticipates TTS truck growth to decline in the range of 6-3%.
Net capital expenditure is now estimated to be in the range of $225-$275 million (prior view: $250-$300 million).
Under the TTS guidance, WERN projects dedicated revenues per truck per week growth to rise from breakeven to 3% in 2024. One-way Truckload revenues per total mile are predicted to decline from breakeven to 3% (prior view: decline 6-3%).
Werner expects the average truck age to be two years for 2024, while the trailer age is forecast to be five years.
Full-year 2024 tax rate is anticipated to be in the range of 24.5%-25.5%.
Zacks Rank and Price Performance
Currently, Werner carries a Zacks Rank #5 (Strong Sell).
Over the past three months, shares of WERN have gained 15%, outperforming the industry’s surge of 10%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.
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Werner (WERN) Shares Down 6% on Q2 Earnings & Revenue Miss
Shares of Werner Enterprises, Inc. (WERN - Free Report) have lost 6.03% in after-market trading on Jul 30, 2024. The downside was owing to the disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings of 17 cents per share lagged the Zacks Consensus Estimate of 23 cents and declined 67.3% on a year-over-year basis.
Total revenues of $760.8 million lagged the Zacks Consensus Estimate of $774.5 million and dipped 6.2% on a year-over-year basis due to $33.1 million or 6%, decrease in Truckload Transportation Services (TTS) revenues and a $15.6 million, or 7% decline in Logistics revenues.
Adjusted operating income of $21.26 million decreased 58% year over year. Adjusted operating margin of 2.8% declined 350 basis points from the year-ago reported quarter.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Werner Enterprises, Inc. price-consensus-eps-surprise-chart | Werner Enterprises, Inc. Quote
Segmental Results
Revenues in the TTS segment fell 6% on a year-over-year basis to $537.06 million due to lower fuel surcharge revenues. Adjusted operating income of $23.33 million fell 51% year over year owing to lower gains on the sale of property and equipment (down 89%), lower fleet size in Dedicated (down 7.1%) and lower One-Way revenue per total mile, net of fuel surcharge (down 2.7%). Adjusted operating margin decreased 410 basis points to 4.3%.
Logistics’ revenues totaled $208.91 million, down 7% year over year. Adjusted operating income of $1.698 billion fell 69% from the year-ago reported quarter. Adjusted operating margin decreased 160 basis points year over year to 0.8%.
Liquidity
As of Jun 30, 2024, Werner had cash and cash equivalents of $70.44 million compared with $60.33 million at the prior-quarter end. Long-term debt (net of current portion) totaled $660 million at the end of the reported quarter compared with $596.25 million at the prior-quarter end.
The company generated $109.1 million of cash from operations in second-quarter 2024. Net capital expenditure amounted to$99.2 million.
During the reported quarter, WERN repurchased 1.6 million shares for a total cost of $60 million. As of Jun 30, 2024, WERN had 3.9 million shares remaining under its new share repurchase authorization approved by the board of directors in May 2024.
Outlook
For 2024, Werner still anticipates TTS truck growth to decline in the range of 6-3%.
Net capital expenditure is now estimated to be in the range of $225-$275 million (prior view: $250-$300 million).
Under the TTS guidance, WERN projects dedicated revenues per truck per week growth to rise from breakeven to 3% in 2024. One-way Truckload revenues per total mile are predicted to decline from breakeven to 3% (prior view: decline 6-3%).
Werner expects the average truck age to be two years for 2024, while the trailer age is forecast to be five years.
Full-year 2024 tax rate is anticipated to be in the range of 24.5%-25.5%.
Zacks Rank and Price Performance
Currently, Werner carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past three months, shares of WERN have gained 15%, outperforming the industry’s surge of 10%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.