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Werner Enterprises, Inc. (WERN - Free Report) reported first-quarter 2020 earnings per share (excluding 7 cents from non-recurring items) of 40 cents, which surpassed the Zacks Consensus Estimate of 35 cents. However, the bottom line declined 23.1% year over year.
Moreover, total revenues of $592.7 million beat the Zacks Consensus Estimate of $574.8 million. However, top line dropped marginally year over year due to lower fuel surcharge and logistics revenues.
Operating income (adjusted) came in at $31.1 million in the reported quarter, down 35%. Moreover, non-GAAP adjusted operating margin plunged 190 basis points (bps) to 6.3%. Operating expenses increased 2.5% to $561.6 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Truckload Transportation Services (TTS) segment’s revenues amounted to $464.86 million, up from $462.89 million in the year-ago quarter. The upside can be attributed to 3.2% increase in average revenues per truck. Adjusted operating income declined 20% to $35.3 million in the quarter. Additionally, adjusted operating margin contracted 190 bps to 7.6%. Adjusted operating ratio also deteriorated 190 bps to 92.4%. Notably, lower the metric, the better.
Werner Logistics segment’s revenues totaled $112.2 million, down 4% year over year. Segmental results were hampered by reduced transactional freight opportunities and intense competition from logistics rivals. Operating income plunged 77% to $1.1 million in the quarter under discussion. Further, operating margin fell 300 bps to 1%. The Other segment accounted for the rest of the top line.
Liquidity
As of Mar 31, the company had cash and cash equivalents of $72.23 million compared with $26.41 million at 2019 end. Long-term debt (net of current portion) totaled $175 million at the end of the first quarter compared with $225 million at 2019 end.
2020 Guidance
The Zacks Rank #3 (Hold) company anticipates truck growth to either remain flat or decline up to 5%. Gains on sales of equipment for the current year has been withdrawn due to weak demand in used truck market. Additionally, net capital expenditures (estimated between $260 million and $300 million) has been consistent from the previous guidance. During the first half of 2020, one-way truckload revenues per total mile are still projected at a decline of in 5-7%. Effective tax rate is still expected in the25-26% band for the first half of 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshot
Apart from Werner Enterprises, there are some other companies in the Zacks Transportation sector like CSX Corporation (CSX - Free Report) , Union Pacific Corporation (UNP - Free Report) and Canadian Pacific Railway Limited’s (CP - Free Report) that have delivered better-than-expected earnings in the first quarter.
CSX reported first-quarter 2020 earnings of $1 per share, which beat the Zacks Consensus Estimate of 92 cents. However, the bottom line fell approximately 2% year over year due to lower revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Moreover, the bottom line increased 11.4% on a year-over-year basis.
Canadian Pacific’s first-quarter 2020 earnings (excluding $1.08 from non-recurring items) of $3.3 (C$4.42) per share surpassed the Zacks Consensus Estimate of $2.86. Quarterly earnings surged more than 55% year over year.
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In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Werner's (WERN) Q4 Earnings Beat Estimates, Decline Y/Y
Werner Enterprises, Inc. (WERN - Free Report) reported first-quarter 2020 earnings per share (excluding 7 cents from non-recurring items) of 40 cents, which surpassed the Zacks Consensus Estimate of 35 cents. However, the bottom line declined 23.1% year over year.
Moreover, total revenues of $592.7 million beat the Zacks Consensus Estimate of $574.8 million. However, top line dropped marginally year over year due to lower fuel surcharge and logistics revenues.
Operating income (adjusted) came in at $31.1 million in the reported quarter, down 35%. Moreover, non-GAAP adjusted operating margin plunged 190 basis points (bps) to 6.3%. Operating expenses increased 2.5% to $561.6 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Werner Enterprises, Inc. price-consensus-eps-surprise-chart | Werner Enterprises, Inc. Quote
Segmental Results
Truckload Transportation Services (TTS) segment’s revenues amounted to $464.86 million, up from $462.89 million in the year-ago quarter. The upside can be attributed to 3.2% increase in average revenues per truck. Adjusted operating income declined 20% to $35.3 million in the quarter. Additionally, adjusted operating margin contracted 190 bps to 7.6%. Adjusted operating ratio also deteriorated 190 bps to 92.4%. Notably, lower the metric, the better.
Werner Logistics segment’s revenues totaled $112.2 million, down 4% year over year. Segmental results were hampered by reduced transactional freight opportunities and intense competition from logistics rivals. Operating income plunged 77% to $1.1 million in the quarter under discussion. Further, operating margin fell 300 bps to 1%. The Other segment accounted for the rest of the top line.
Liquidity
As of Mar 31, the company had cash and cash equivalents of $72.23 million compared with $26.41 million at 2019 end. Long-term debt (net of current portion) totaled $175 million at the end of the first quarter compared with $225 million at 2019 end.
2020 Guidance
The Zacks Rank #3 (Hold) company anticipates truck growth to either remain flat or decline up to 5%. Gains on sales of equipment for the current year has been withdrawn due to weak demand in used truck market. Additionally, net capital expenditures (estimated between $260 million and $300 million) has been consistent from the previous guidance. During the first half of 2020, one-way truckload revenues per total mile are still projected at a decline of in 5-7%. Effective tax rate is still expected in the25-26% band for the first half of 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sectorial Snapshot
Apart from Werner Enterprises, there are some other companies in the Zacks Transportation sector like CSX Corporation (CSX - Free Report) , Union Pacific Corporation (UNP - Free Report) and Canadian Pacific Railway Limited’s (CP - Free Report) that have delivered better-than-expected earnings in the first quarter.
CSX reported first-quarter 2020 earnings of $1 per share, which beat the Zacks Consensus Estimate of 92 cents. However, the bottom line fell approximately 2% year over year due to lower revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Moreover, the bottom line increased 11.4% on a year-over-year basis.
Canadian Pacific’s first-quarter 2020 earnings (excluding $1.08 from non-recurring items) of $3.3 (C$4.42) per share surpassed the Zacks Consensus Estimate of $2.86. Quarterly earnings surged more than 55% year over year.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>