Werner Revenue and Profit Decline on Q3 Market Struggles
[Stay on top of transportation news: Get TTNews in your inbox.]
Werner Enterprises on Oct. 29 reported declines in third-quarter net income and revenue amid what it described as “persistent pricing and margin pressures” across key segments, especially in logistics.
The Omaha, Neb.-based carrier’s Q3 net income fell 72% to $6.6 million, or 11 cents per share, compared with $23.7 million, 37 cents, a year ago. Revenue slid 9% to $745.7 million compared with $817.7 million in the same period last year.
“Freight conditions remained challenging while tightening late in the quarter from hurricane-related supply chain disruptions,” Werner CEO Derek Leathers said. “We continue to make structural changes, driving operating efficiencies, cost savings and advancing our technology road map. We remain focused on positioning Werner for strength and creating long-term value for our shareholders as conditions improve.”
Werner ranks No. 16 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 30 on the TT Top 100 list of the largest logistics companies.
The Truckload Transportation Services segment, Werner’s primary revenue contributor, saw revenue decline by 9% to $522.8 million, reflecting ongoing pricing pressure as well as the effects of a planned 9.9% fleet reduction. Segment operating income fell 44% to $21.6 million.
Operational improvements within the segment lifted average revenue per truck per week by 3.5% year over year, net of fuel. The One-Way Truckload unit led this growth, posting a 6.9% increase in average revenue per truck, with total miles per truck up 6.6%.
Werner expects to ultimately reduce its fleet size by 6% to 8%, aligning with its strategy to control capacity in a competitive trucking market. The company revised its capital expenditure forecast to a range of $240 million to $260 million, emphasizing investments in an updated, low-age fleet and technology to drive operational efficiency. At the end of the quarter, trucks in Werner’s fleet were an average of 2 years old, while trailers were on average 5.2 years old.
The Werner Logistics segment, which covers truckload brokerage, intermodal and final-mile services, saw revenue decline 10% to $206.8 million. Truckload Logistics volumes remained pressured by competition and compressed gross margins, the company noted.
Interest expenses increased 33% to $9.3 million, driven by higher-cost debt replacing earlier lower-cost debt and a rise in variable-rate debt costs.
Want more news? Listen to today's daily briefing below or go here for more info:
