Werner 2Q Revenue Is Up, but Company Says Freight Volume Is Slowing
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Werner Enterprises Inc. on July 25 reported net income of $43.3 million, or 62 cents a share, for the quarter ending June 30. The results marked a 13.4% increase from $38.2 million, or 53 cents a share, from the second quarter in 2018.
Revenue increased 1.4% to $627.5 million, compared with $619.1 million for the same period a year ago.
At the halfway point of 2019, net income was $79.4 million, or $1.13 a share, compared with $66 million and 91 cents a share in the first six months of 2018. Revenue was $1.22 billion in the first six months, compared with $1.18 billion in the first half of 2018.
“We are very pleased to report adjusted earnings-per-share growth of 3%, despite comparing to a very strong second-quarter 2018 that produced 90% adjusted earnings growth due to unusually strong freight demand and pricing,” CEO Derek Leathers said in a statement. “The strength of our diversified portfolio, our new truck and trailer fleet, increasingly experienced drivers and our committed Werner team led to our superior performance.”
Operating ratio improved to 89.2 compared with 90.8 at this time last year. For the first six months of 2019, operating ratio is 90, an improvement from 91.5 for the first six months of 2018. Operating ratio, or operating expenses as a percentage of revenue, is an industry metric used to measure efficiency. The lower the ratio, the greater the company’s ability to generate profit.
Werner said its truckload revenue, net of its fuel surcharge, increased 4% to $411.4 million, compared with $395 million in 2018. Revenue was up, in part because the company increased the number of trucks in service by 5.2%. Due to the growth in company trucks, and a decline running independent owner-operator trucks, miles by company drivers increased by 4.8 million. At the same time, miles behind the wheel by independent drivers declined by 200,000 miles.
Logistics revenue dropped by 2.4%, to $130.8 million versus $134 million in 2018. The company attributed the drop in logistics revenue to decreasing freight demand and lower spot market prices. Officials also said that in the second quarter, there was a drop-off in freight demand in its One-Way Truckload fleet. The company’s financial statement showed that volume was significantly below 2018’s high watermark for the trucking industry.
Werner Enterprises ranks No. 15 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
