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Werner (WERN) Down 4.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Werner Enterprises (WERN - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Werner due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Werner's Q2 Earnings Lag Estimates
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 $21.3 million decreased 58% year over year. Adjusted operating margin of 2.8% declined 350 basis points from the year-ago reported quarter.
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 3-6%.
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%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -34.92% due to these changes.
VGM Scores
Currently, Werner has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Werner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Werner (WERN) Down 4.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Werner Enterprises (WERN - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Werner due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Werner's Q2 Earnings Lag Estimates
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 $21.3 million decreased 58% year over year. Adjusted operating margin of 2.8% declined 350 basis points from the year-ago reported quarter.
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 3-6%.
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%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -34.92% due to these changes.
VGM Scores
Currently, Werner has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Werner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.