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Werner's (WERN) Earnings Beat Estimates in Q2, Sales Miss
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Werner Enterprises, Inc. (WERN - Free Report) reported second-quarter 2020 earnings per share (excluding 6 cents from non-recurring items) of 62 cents, which surpassed the Zacks Consensus Estimate of 40 cents. However, the bottom line declined 1.6% year over year.
However, total revenues of $569 million missed the Zacks Consensus Estimate of $580.8 million and dropped 9.3% year over year due to lower fuel surcharge and logistics revenues.
Operating income (adjusted) came in at $57.7 million in the reported quarter, down 3%. Moreover, adjusted operating margin improved 70 basis points (bps) to 10.1%. Operating expenses declined 9.3% to $516.1 million.
Werner Enterprises, Inc. Price, Consensus and EPS Surprise
Truckload Transportation Services (TTS) segment’s revenues fell $445.1 million, from $479.9 million in the year-ago quarter. The downside can be attributed to $28.3 million fall in fuel surcharge revenues and 2.2% decline in average trucks in service. Adjusted operating income inched up 7% to $56.1 million in the quarter. Additionally, adjusted operating margin expanded 170 bps to 12.6%. Adjusted operating ratio increased 170 bps to 87.4%. Notably, lower the metric, the better.
Werner Logistics segment’s revenues totalled $110.2 million, down 16% year over year. Segmental results were hampered by softer freight market, which reduced volumes by 9%. Operating income plunged 39% to $3.1 million in the quarter under discussion. Further, operating margin fell 120 bps to 2.8%. The Other segment accounted for the rest of the top line.
Liquidity
As of Jun 30, the company had cash and cash equivalents of $65.38 million compared with $26.41 million at 2019 end. Long-term debt (net of current portion) totalled $175 million at the end of the second quarter compared with $225 million at 2019 end.
Werner anticipates truck growth to decline between 3% and 1% compared with its previous guidance where the metric was expected to either remain flat or decline up to 5%. The company did not provide any guidance pertaining to gains on sales of equipment for the current year. Additionally, net capital expenditures (estimated between $260 million and $300 million) are in line with its previous guidance. During the second half of 2020, one-way truckload revenues per total mile are projected to rise 2% or decline up to 1% compared with previous expectation where the metric is expected to decline 5-7%. Effective tax rate is now anticipated between 24.5% and 25.5% compared with the previous guidance in the 25-26% band.
Sectorial Snapshot
Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.
Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year.
J.B. Hunt Transport (JBHT - Free Report) reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. The company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.
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Werner's (WERN) Earnings Beat Estimates in Q2, Sales Miss
Werner Enterprises, Inc. (WERN - Free Report) reported second-quarter 2020 earnings per share (excluding 6 cents from non-recurring items) of 62 cents, which surpassed the Zacks Consensus Estimate of 40 cents. However, the bottom line declined 1.6% year over year.
However, total revenues of $569 million missed the Zacks Consensus Estimate of $580.8 million and dropped 9.3% year over year due to lower fuel surcharge and logistics revenues.
Operating income (adjusted) came in at $57.7 million in the reported quarter, down 3%. Moreover, adjusted operating margin improved 70 basis points (bps) to 10.1%. Operating expenses declined 9.3% to $516.1 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 fell $445.1 million, from $479.9 million in the year-ago quarter. The downside can be attributed to $28.3 million fall in fuel surcharge revenues and 2.2% decline in average trucks in service. Adjusted operating income inched up 7% to $56.1 million in the quarter. Additionally, adjusted operating margin expanded 170 bps to 12.6%. Adjusted operating ratio increased 170 bps to 87.4%. Notably, lower the metric, the better.
Werner Logistics segment’s revenues totalled $110.2 million, down 16% year over year. Segmental results were hampered by softer freight market, which reduced volumes by 9%. Operating income plunged 39% to $3.1 million in the quarter under discussion. Further, operating margin fell 120 bps to 2.8%. The Other segment accounted for the rest of the top line.
Liquidity
As of Jun 30, the company had cash and cash equivalents of $65.38 million compared with $26.41 million at 2019 end. Long-term debt (net of current portion) totalled $175 million at the end of the second quarter compared with $225 million at 2019 end.
Zacks Rank
Werner currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
2020 Guidance
Werner anticipates truck growth to decline between 3% and 1% compared with its previous guidance where the metric was expected to either remain flat or decline up to 5%. The company did not provide any guidance pertaining to gains on sales of equipment for the current year. Additionally, net capital expenditures (estimated between $260 million and $300 million) are in line with its previous guidance. During the second half of 2020, one-way truckload revenues per total mile are projected to rise 2% or decline up to 1% compared with previous expectation where the metric is expected to decline 5-7%. Effective tax rate is now anticipated between 24.5% and 25.5% compared with the previous guidance in the 25-26% band.
Sectorial Snapshot
Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.
Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year.
J.B. Hunt Transport (JBHT - Free Report) reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.
Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. The company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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