Werner Reports 24% Increase in First Quarter Revenue
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Werner Enterprises posted net income of $53.7 million, or 82 cents per diluted share, for the first quarter, compared with $46.5 million, 68 cents, in the same period a year earlier, the company said. company on May 3.
The Omaha, Neb.-based freight carrier and logistics company said revenue for the period ending March 31 rose 24% to $764.6 million from $616.4 million of dollars.
“I am delighted to share another quarter of strong financial results,” Werner CEO Derek Leathers said on a call with investors. “I am very proud of our Werner team for achieving strong first quarter revenue and net income growth for our truckload and logistics segments.”
Werner has a consumer-focused freight base with more than three-quarters of its revenue coming from retail and food. Within nearly 60% of the retail business, the company focuses on discount retailers and home improvement.
“These winning customers increase their market share, and Werner continues to grow with them,” Leathers said. “Three of our top five customers are discount retailers who perform well in economy markets when consumers value value even more. The other two clients in our top five are industry-leading home improvement and beverage companies. »
Leathers added that five of the top 11 customers are in discount retail or food and beverage. He noted that they ship consumer non-durables with repeatable freight that is less sensitive to changes in the business cycle than durable goods.
“Economic uncertainties are growing with inflation, tightening interest rates and the effects of war in Ukraine,” Leathers said. “Our business model is well positioned to adapt, perform and even thrive in disruptive markets. During the first quarter, the purchase of new trucks and trailers was difficult, and we were not able to receive our full allocation. »
The results were mixed when it came to expectations from Wall Street investment analysts, who were looking for 86 cents per share and quarterly revenue of $744.29 million, according to Zacks Consensus Estimate.
Werner noted in the earnings report that his strategic minority equity investments in standalone tech companies in the first quarter suffered market valuation changes resulting in an unrealized loss on equity securities, which led to lower earnings. non-operating $9.8 million. Interest expense increased from $800,000 to $1.4 million due to an increase in average outstanding debt. This decrease was partly offset by a decrease in the average effective interest rate incurred on the debt.
The truckload transportation services segment saw revenue increase 21% to $558.4 million from $462.9 million in the same period last year. Operating profit rose 32% to $76.1 million from $57.6 million last year. The segment includes dedicated and one-way truckload operations.
One-way truckload revenues increased 19.1% to $186.8 million from $156.8 million last year.
Dedicated revenue increased by 12.5%, from $253.8 million to $285.6 million.
The report attributes the results of the truckload segment to fleet growth, higher freight rates and increased earnings on the sale of equipment. This was offset by cost increases for driver compensation and supply, equipment maintenance and insurance.
“Dedicated has nearly 5,200 trucks and has achieved 5% year-over-year truck growth,” Leathers said. “Dedicated continues to thrive and grow with strong demand from our key long-term customers. We consistently provide quality service and technical solutions to meet their complex shipping requirements. And we continue to have a good pipeline of dedicated auction activity with new and existing clients. One-Way Truck Loading has approximately 3,000 trucks and grew its fleet by 7% year-on-year. One-way truckloads saw strong freight demand in January and February, which then moderated slightly in March.
The logistics segment saw revenue increase 37% to $189 million from $137.9 million in the prior year quarter. Operating profit jumped 90% to $8.68 million from $4.57 million. Operating profit was driven by improved revenue growth and an increase in operating margin. The segment includes full load logistics, intermodal operations and last mile operations.
- Truckload logistics revenue increased by 46%. This was due to a 24% increase in revenue per shipment and a 19% increase in shipments.
- Intermodal revenues increased by 29%. This growth was supported by a 37% increase in revenue per shipment which was partially offset by a 6% decline in shipments.
- Last mile revenue increased by $18.1 million. This is mainly due to the growth of the acquisition of NEHDS in November 2021.
Werner noted in the report that logistics revenue grew 55% excluding Werner Global Logistics. The trading division covered freight forwarding services for international sea and air shipments. Scan Global Logistics Group acquired it during the first quarter of 2021.
Werner ranks 17th on the Transport Topics Top 100 list of the largest for-hire carriers in North America and 33rd on the TT Top 100 list of the largest logistics companies.
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