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Werner's (WERN) Q4 Earnings Beat Estimates, Increase Y/Y

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Werner Enterprises Inc. (WERN - Free Report) reported fourth-quarter 2020 earnings (excluding a penny from non-recurring items) of 89 cents per share, surpassing the Zacks Consensus Estimate of 78 cents. Moreover, the bottom line surged 32.8% year over year. Reduced operating expenses aided the bottom line.

Total revenues of $620.3 million outperformed the Zacks Consensus Estimate of $611.8 million. The top line was flat year over year, hurt by low fuel surcharge revenues.

Operating income (adjusted) came in at $82.71 million in the reported quarter, up 30% year over year. Moreover, adjusted operating margin improved 310 basis points (bps) to 13.3%. Operating expenses dipped 3.1% to $538.85 million.

Werner Enterprises, Inc. Price, Consensus and EPS Surprise

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 2% year over year to $475.04 million. The downside can be attributed to 35% decrease in fuel surcharge revenues and 3.1% decline in average trucks in service. Adjusted operating income ascended 32% to $79.87 million.  Additionally, adjusted operating margin expanded 440 bps to 16.8%. Adjusted operating ratio (operating expenses as a percentage of revenues) improved 440 bps to 83.2%. Notably, lower the value of the metric, the better.

Werner Logistics segment’s revenues totaled $130.11 million, up 8% year over year due to 21% rise in intermodal logistics volume. The segment reported operating income of $2.63 million, down 22% from the year-ago period. Further, operating margin was 2%, reflecting a decrease of 80 bps from the fourth quarter of 2019. The Other segment accounted for the rest of the top line.

Liquidity

As of Dec 31, 2020, Werner, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $29.33 million compared with $26.42 million at 2019 end. Long-term debt (net of current portion) totaled $175 million at the end of the fourth quarter compared with $225 million at 2019 end. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

2021 Outlook

Werner anticipates TTS truck growth of 1-3% year over year in 2021. Additionally, it expects gains on sales of equipment to be in the range of $12 million-$15 million in the current year. Meanwhile, net capital expenditures are estimated in the band of $275 million-$300 million.

Sectorial Snapshot

Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.

United Airlines (UAL - Free Report) , carrying a Zacks Rank #3, incurred a loss (excluding 6 cents from non-recurring items) of $7 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $6.56. Meanwhile, operating revenues of $3,412 million lagged the Zacks Consensus Estimate of $3,420.4 million.

J.B. Hunt Transport Services (JBHT - Free Report) , carrying a Zacks Rank #3, reported earnings of $1.44 per share, beating the Zacks Consensus Estimate of $1.27. Total operating revenues of $2,737.7 million also surpassed the Zacks Consensus Estimate of $2,514.3 million.

Delta Air Lines (DAL - Free Report) , carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $1.34 from non-recurring items) of $2.53 per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of $2.43. Total revenues of $3,973 million topped the Zacks Consensus Estimate of $3,754.5 million.

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